Match each word or phrase with its description below. (a) Written promise (as evidenced by a formal instrument) for amounts to be received. (b) A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period. (c) A measure of the liquidity of accounts receivable, computed by dividing net credit sales by average net accounts receivable. (d) A method of accounting for bad debts that involves charging receivable balances to Bad Debt Expense at the time receivables from a particular company are determined to be uncollectible. (e) A finance company or bank that buys receivables from businesses for a fee and then collects the payments directly from the customers. The net amount a company expects to receive in cash from receivables. (e) The threat of nonpayment from a single large customer or class of customers that could adversely affect the financial health of the company. S (h) A note that is not paid in full at maturity. (1) A method of estimating the amount of bad debt expense whereby management establishes a percentage relationship between the amount of receivables and the

Match each word or phrase with its description below. (a) Written promise (as evidenced by a formal instrument) for amounts to be received. (b) A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period. (c) A measure of the liquidity of accounts receivable, computed by dividing net credit sales by average net accounts receivable. (d) A method of accounting for bad debts that involves charging receivable balances to Bad Debt Expense at the time receivables from a particular company are determined to be uncollectible. (e) A finance company or bank that buys receivables from businesses for a fee and then collects the payments directly from the customers. The net amount a company expects to receive in cash from receivables. (e) The threat of nonpayment from a single large customer or class of customers that could adversely affect the financial health of the company. S (h) A note that is not paid in full at maturity. (1) A method of estimating the amount of bad debt expense whereby management establishes a percentage relationship between the amount of receivables and the

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10MC: Which of the following estimation methods considers the amount of time past due when computing bad...

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Which of the following estimation methods considers the amount of time past due when computing bad debt? A. balance sheet method B. direct write-off method C. income statement method D. balance sheet aging of receivables method
Which account type is used to record bad debt estimation and is a contra account to Accounts Receivable?
Using the following key, identify the effects of the following transactions or conditions on the various financial statement elements: I = increases; D = decreases; NE = no effect. A.credit sale b. Collection of a portion of accounts receivable c. Estimate of bad debts d. Write-off of a specific uncollectible account
Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? a.To estimate the amount of bad debt expense based on an aging of accounts receivable. b.To estimate bad debt expense based on a percentage of credit sales made during the period. c.To determine the amount of uncollectible accounts during a given period. d.To facilitate the use of the direct write-off method.
Discuss the (a) focus and (b) financial statement emphasis of the percent of sales and the analysis of receivables methods of estimating bad debts.
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.
Organizations have to plan and account for uncollectible debt. Does estimating uncollectible accounts help to improve the accuracy of financial statements? If so, explain how by examining some of the factors that go into this estimation. Examine the difference between accounts receivable and notes receivable. How does each play into the previous questions?
The net figure for accounts receivable (debtors) after deducting the allowance for uncollectible debts account: Select one: a. overstates the realisable value of debtors. b. is a contra account. c. understates the realisable value of debtors. d. represents the expected cash to be collected. e. None of the above answers is correct.
An allowance doubtful debts account is created to estimate ___. Select one: A. the expected number of debtors B. the expected number of creditors C. the amount of expected bad debts recovered D. the amount of expected bad debts
Which of the following concepts relates to using the allowance method in accounting for accounts receivable? Bad debt expense is management's determination of which accounts will be sent to the attorney for collection. а. O b. Bad debt expense is an estimate that is based on historical and prospective information. Ос. Bad debt expense is an estimate that is based only on an analysis of the receivables ageing. O d. Bad debt expense is based on the actual amounts determined to be uncollectible.
When using the allowance method for accounting for bad debts, accounts receivable is reported on the balance sheet at the expected net realizable value. When a particular receivable from a customer ultimately is determined to be uncollectible and is written off, the recording of this event will Group of answer choices A)decrease the net realizable value of the accounts receivable. B)have an effect that is not determinable from the information given. C)increase the net realizable value of the accounts receivable. D)decrease total current assets. e)None of the above
Match the terms in the left-hand column below with the descriptions on the right. 1. Percentage of credit sales method a. Required to recognize bad debt under GAAP 2. Direct write-off method b. Estimate of bad debt expense based on the age of outstanding receivables 3. Allowance method c. Estimate of bad debt based on credit sales 4. Percentage of accounts receivable method d. Required to recognize bad debt under tax law