Collection of a $1,000 Accounts Receivable Collection of a $1,000 Accounts ReceivableA) increases an asset $1,000; decreases an asset $1,000.B) decreases a liability $1,000; increases stockholders' equity $1,000.C) decreases an asset $1,000; decreases a liability $1,000.D) increases an asset $1,000; decreases a liability $1,000.

Option A: This option is correct because collection of $1,000 causes increase in cash (an asset) and…

Answered: Collection of a $1,000 Accounts…

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter5: Ethical Responsibilities Of Independent Auditors

Section5.6: Richard Grimes, Staff Accountant

Problem 1Q

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Suppose the balance in the Allowance for Doubtful Accounts at the end of year is a $400 Debit balance before adjustment. The company estimates future uncollectible accounts to be $3,200. At what amount would Bad Debt Expense be reported in the current year's income statement? A. $400 B. $2,800 C. $3,600 D. $3,200
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25) Under the direct-write-off method, uncollectible accounts expense is recognized A. As a percentage of net sales during the period. B. As a percentage of net credit sales during the period. C. As indicated by aging the accounts receivable at the end of the period. D. As specific accounts receivable are determined to be worthless.
d) Golden Music Company uses the allowance method to estimate uncollectible accounts receivable. An aging of the accounts receivable revealed the following: Estimated Percentage Uncollectible Current Accounts $17,000 $1,500 $1,200 $500 $900 $21,100 1% 1-30 days past due 31–60 days past due 61–90 days past due Over 90 days past due Total Accounts Receivable 3% 6% 12% 25% On 31 December 2021, the company has found out that a customer went bankrupt and management agreed that the accounts receivable of $900 included above which is past due for over 90 days can be written off. i) Compute the total estimated uncollectible accounts receivable as at 31 December 2021. ii) Prepare the journal entry year-end to write off the accounts receivable of $900 and the adjusting journal entry to record the bad debts for the year ended 31 December 2021.
Which of the following is correct about non-trade receivables being classified as current assets?a. non-trade receivables are classified as current assets if these are collectible within one year or the company's normal operating cycle. whichever is shorter.b. non-trade receivables are classified as current assets if these are collectible within the company's normal operating cyclec. non-trade receivables are classified as current assets if these are collectible within one yeard. non-trade receivables are classified as current assets if these are collectible within one year or the company's normal operating cycle, whichever is longer.e. non-trade receivables are never classified as current assets.
In regard to current liabilities which of the following is false? A. Current liabilities are liabilities that you recently paid. B. Accounts payable is normally a current liability. C. A $100,000 note payable with $10,000 of it due in six months would be classified on the balance sheet as a $10,000 current liability and a $90,000 long term liability. D. Current liabilities are debts and obligations that must be paid, settled or fulfilled within 12 months or less.
Elegant Universal uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Elegant Universal considers changing the past-due categories as follows. A. Complete each table by filling in the blanks. B. Determine the difference between totals uncollectible. C. Describe the categories change effect on net income and accounts receivable.
Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.
a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. c. Determine the net realizable value of accounts receivable.
What is the net realizable value (nrv) of account receivable? General accounting question
Using the percentage-of-receivables method for recording bad debt expense,estimated uncollectible accounts are $45,000. If the balance of the Allowancefor Doubtful Accounts is $6,000 balance before adjustment, what is the amountof bad debt expense for that period?a. $45,000b. $39,000c. $51,000d. $6,000
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Collection of a $1,000 Accounts Receivable A) increases an asset $1,000; decreases an asset $1,000. B) decreases a liability $1,000; increases stockholders' equity $1,000. C) decreases an asset $1,000; decreases a liability $1,000. D) increases an asset $1,000; decreases a liability $1,000.