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Please solve all the MCQ with detailed answer for both correct and incorrect answers

Please solve all the MCQ with detailed answer for both correct and incorrect answers

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please solve all the MCQ with detailed answer for both correct and incorrect answers

6. Lite Company received a 90 day, six percent note receivable for $10,000 on December 1. How much interest should be accrued on December 31? a. $150 b. $90 C. $50 d. $25 7. Wesson Company uses the allowance method to record its expected credit losses. It estimates its losses at one percent of credit sales, which were $750,000 during the year. The Accounts Receivable balance was $220,000 and the Allowance for Doubtful Accounts had a credit balance of $1,000 at year-end. What amount is the debit to the Bad Debts Expense? $7,500 b. $8,500 d. C. $6,500 d. $3,200 8. Rufus & Company pays a three percent credit card fee on all credit sales, and receives a cash deposit immediately following each credit card transaction. If credit sales for the company total $15,000 on December 13, what journal entry should be recorded to recognize the receipt of cash and the credit card fee expense? a. Debit Cash $14,550; debit Credit Card Fee Expense $450. Debit Cash $15,000; credit Credit Card Fee Expense $450. Debit Cash $15,450; debit Credit Card Fee Expense $450. Debit Cash $15,450; credit Credit Card Fee Expense $450. 9. Which of the following statements is true? a. The direct write-off method is generally accepted. The percentage of net sales method estimates the bad debts expense indirectly. The accounts receivable aging method estimates the bad debts expense indirectly. d. None of the above is true. 10. On September 1, the Pavey Company accepted a $24,000, 60 day, nine percent, promissory note in exchange for overdue accounts receivable balance for the same amount from the Wagner Company. On November 30, the Wagner Company dishonored the note. What journal entry should be recorded on November 30? a. Debit Dishonored Note Receivable Expense; credit Notes Receivable. b. Debit Allowance for Doubtful Accounts; credit Notes Receivable. Debit Accounts Receivable; credit Interest Income; credit Notes Receivable. C. d. None of the above entries is correct.
Transcribed Image Text:6. Lite Company received a 90 day, six percent note receivable for $10,000 on December 1. How much interest should be accrued on December 31? a. $150 b. $90 C. $50 d. $25 7. Wesson Company uses the allowance method to record its expected credit losses. It estimates its losses at one percent of credit sales, which were $750,000 during the year. The Accounts Receivable balance was $220,000 and the Allowance for Doubtful Accounts had a credit balance of $1,000 at year-end. What amount is the debit to the Bad Debts Expense? $7,500 b. $8,500 d. C. $6,500 d. $3,200 8. Rufus & Company pays a three percent credit card fee on all credit sales, and receives a cash deposit immediately following each credit card transaction. If credit sales for the company total $15,000 on December 13, what journal entry should be recorded to recognize the receipt of cash and the credit card fee expense? a. Debit Cash $14,550; debit Credit Card Fee Expense $450. Debit Cash $15,000; credit Credit Card Fee Expense $450. Debit Cash $15,450; debit Credit Card Fee Expense $450. Debit Cash $15,450; credit Credit Card Fee Expense $450. 9. Which of the following statements is true? a. The direct write-off method is generally accepted. The percentage of net sales method estimates the bad debts expense indirectly. The accounts receivable aging method estimates the bad debts expense indirectly. d. None of the above is true. 10. On September 1, the Pavey Company accepted a $24,000, 60 day, nine percent, promissory note in exchange for overdue accounts receivable balance for the same amount from the Wagner Company. On November 30, the Wagner Company dishonored the note. What journal entry should be recorded on November 30? a. Debit Dishonored Note Receivable Expense; credit Notes Receivable. b. Debit Allowance for Doubtful Accounts; credit Notes Receivable. Debit Accounts Receivable; credit Interest Income; credit Notes Receivable. C. d. None of the above entries is correct.
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