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    Practice 1

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    The document discusses accounting for accounts receivable and related concepts. It provides examples of transactions and calculations related to accounts receivable, allowances for doubtful accounts, and net realizable value. It also asks multiple choice questions testing understanding of accounts receivable concepts.

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    Practice 1

    Uploaded by

    yes yesno
    9 views3 pages
    The document discusses accounting for accounts receivable and related concepts. It provides examples of transactions and calculations related to accounts receivable, allowances for doubtful accounts, and net realizable value. It also asks multiple choice questions testing understanding of accounts receivable concepts.

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    The document discusses accounting for accounts receivable and related concepts. It provides examples of transactions and calculations related to accounts receivable, allowances for doubtful accounts, and net realizable value. It also asks multiple choice questions testing understanding of accounts receivable concepts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    9 views3 pages

    Practice 1

    Uploaded by

    yes yesno
    The document discusses accounting for accounts receivable and related concepts. It provides examples of transactions and calculations related to accounts receivable, allowances for doubtful accounts, and net realizable value. It also asks multiple choice questions testing understanding of accounts receivable concepts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    1.

    The following accounts were extracted from Point Company’s unadjusted trial balance at Dec 31,2010:

    Debit Credit

    Accounts receivable 1,000,000

    Allowance for doubtful accounts 8,000

    Net credit sales 4,000,000

    Point estimates that 3% of the gross accounts receivable will become uncollectible. After adjustment at December 31,2010, the

    allowance for doubtful accounts should have a credit balance of 30,000

    2. At the end of its first year of operations, December 31,2010, Solid Company had accounts receivable of 500,000, which were net of the related

    allowance for doubtful accounts. During 2010, Solid recorded charges to bad debt expense of 80,000 and wrote off uncollectible accounts

    receivable of 20,000. How much should Solid Company report in its December 31,2010 balance sheet as accounts receivable before the allowance

    for doubtful accounts? c. 560,000

    3. On June 1,2010, Thomas Corp sold merchandise with a list price of 300,000 to Peter Company on account. Peter was given the following trade

    discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made F.O.B. point of destination. On June 10,2010, when the

    merchandise were delivered, Peter Company paid 5,000 of delivery costs for Thomas as an accommodation. What amount should Peter Company

    remit to Thomas Company as full payment on June 14,2010? d. 159,640

    4. Accounting for the interest in a non interest bearing note receivable is an example of what aspect of accounting theory?

    a. Matching

    b. Verifiability

    c. Substance over form

    d. Accounting entity
    5. The following information relates to accounts receivable of Jam Company for the year 2011:

    Accounts receivable, 1/1 1,300,000

    Credit Sales 5,500,000

    Sales Return 150,000

    Accounts written off 100,000

    Collections from customers 5,000,000

    Estimated future sales return at 12/31 50,000

    Estimated uncollectible accounts per aging at 12/31 250,000

    What amount should Jam report as net realizable value of accounts receivable at Dec. 31, 2011? b. 1, 250,000

    6. Which of the following transactions is not a common source of receivables?

    a. Sales of merchandise

    b. Amount lent to others

    c. Performance of services

    d. Casualty damage, not covered by insurance

    7. Credit balances in accounts receivable arising from customer’s advances should be classified as

    a. Current liabilities

    b. Part of accounts payable

    c. Long term liabilities

    d. Deduction from accounts receivable

    8. Receivable balances should be valued at

    a. Face amount
    b. Face amount minus allowance for doubtful accounts

    c. Face amount minus allowance for doubtful accounts and for any anticipated adjustments which in the normal course of events

    will reduce the amount of receivable to estimated realizable value

    d. Maturity value

    11. The total amount of receivables of BOGAY reveals the following:

    Accounts receivable 600,000

    Customer’s credit balances (50,000)

    Installment sales 100,000

    Advances to trade suppliers 40,000

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