04 Accounts Receivable - (M.C)

ACCOUNTS RECEIVABLE – MULTIPLE CHOICE
1. At year-end, Harem Company reported accounts receivable of P8,200,000. An analysis of the accounts receivable
showed the following:
Accounts known to be worthless 100, 000

Advance payments to creditors on purchase orders 400,000
Advances to affiliated entities 1,000,000
Customers’ accounts reporting credit balances arising from sales returns ( 600,000)
Interest receivable on bonds 400,000
Trade accounts receivable 3,500,000
Subscription receivable due in 30 days 2,200,000
Trade installment receivable due 1—18 months including
unearned finance charge of P50,000 850,000
Trade accounts receivable from officers due currently 150,000
Trade accounts on which postdated checks are held and no entries were made
on receipt of checks 200,000
What is the correct balance of trade accounts receivable?

A. 4,650,000
B. 4,700,000
C. 4,150,000
D. 4,050 000
2. Faith Company provided the following information relating to current operation :
Accounts receivable, January 1 4,000,000

Accounts receivable collected 8,400,000
Cash sales 2,000,000
Inventory, January 1 4,800,000
Inventory, December 31 4,400,000
Purchases 8,000,000
Gross margin on sales 4,200,000
What is the balance of accounts receivable on December 31?

A. 8, 200,000
B. 6,200,000
C. 2,000,000
D. 4,200,000
3. Valiant Company reported the following analysis of current receivables at year –end:
Trade accounts receivable 2,000,000

Allowance for doubtful accounts (100,000)
Claim against shipper for goods lost in transit in November 300,000
Selling price of unsold goods sent by Valiant on consignment at 150% of
cost and not included in ending inventory 600,000
Security deposit on lease of warehouse 200,000
Total 3,000,000
What total amount should be reported as current trade and other receivables?
A. 2,200,000
B. 2,400,000
C. 2,300,000
D. 3,000,000
4. Jinx Company provided the following information for the current year in relation to accounts receivable:
Accounts receivable, January 1 1,300,000

Credit sales 5,500,000
Sales return 150,000
Accounts written off 100,000
Collections from costumers 5,000,000
Estimated future sales return on December 31 50,000
Estimated uncollectible accounts per aging at year end 250,000
What amount should be reported as net realizable value of accounts receivable on December 31?
A. 1,550,000
B. 1,250,000
C. 1,300,000
D. 1,500,000
5. Rapture company had the following information for the current year relating to accounts receivable:
Accounts receivable at January 1,300,000

Credit sales 5,400,000
Page 1 of 2
Prepared by: Generoso Ermoso Western Institute of Technology
ACCOUNTS RECEIVABLE – MULTIPLE CHOICE
Collections from costumers excluding recovery 4,750,000
Accounts written off 125,000
Collection of accounts written of in prior year customer credit was
not reestablished 25,000
Estimated uncollectible receivables per aging at December 31 165,000
What is the balance accounts receivable, before allowance for doubtful accounts, on December 31?
A. 1,825,000
B. 1,850,000
C. 1,950,000
D. 1,990,000
6. At the end of the first year of operations, Majestic Company had accounts receivable of P6,000,000, net of the related
allowance for doubtful accounts. During the current year, the entity recorded charges to bad debt expense of P900,000
and wrote of P200,000 of uncollectible accounts receivable. At ear-end, what amount should be reported as accounts
receivable before allowance for doubtful accounts?
A. 6,000,000
B. 6,200,000
C. 6,700,000
D. 7,100,000
7. At the beginning of current year, Malice Company reported allowance for doubtful accounts of P300,000. During the
current year, the entity charged P650,000 to doubtful account expense, wrote off P450,000 of uncollectible accounts
receivable, and unexpectedly recovered P100,000 of bad debts written off in the prior year. What is the allowance for
doubtful accounts at year-end?
A. 500,000
B. 600,000
C. 650,000
D. 950,000
8. Omega Company prepared an aging of accounts receivable on December 31 and determined that the net realizable
value of the accounts receivable was P2,500,000.
Allowance for doubtful accounts on January 1 280,000

Accounts written off as uncollectible 230,000
Accounts receivable on December 31 2,700,000
Uncollectible accounts recovery 50,000
What is the doubtful accounts for the current year?

A. 230,000
B. 200,000
C. 150,000
D. 100,000
9. Mill Company’s allowance for doubtful accounts was P1,000,000 at the end of 2018 and P900,000 at the end of 2017.
For the year ended December 31, 2018, the entity reported doubtful accounts expense of P160,000 in the income
statement. What amount was debited to the appropriate account to write off uncollectible accounts in 2018?
A. 260,000
B. 100,000
C. 160,000
D. 60,000
10. Regalia Company used the allowance method of accounting for uncollectible accounts. During the current year, the entity
had charged P800,000 to bad debt expense, and wrote off accounts receivable of P900,000 as uncollectible. What was
the decrease in working capital as a result of the transactions relating to accounts receivable?
A. 900,000
B. 800,000
C. 100,000
D. 0
11. Scant Company reported the following balances after adjustment at year-end.
2018 2017
Accounts receivable 5,250,000 4,800,000
Net realizable value 5,100,000 4,725,000
During 2018, the entity wrote off customer accounts totaling P160,000 and collected P40,000 on accounts written off in
previous years. What amount should be reported as doubtful accounts expense for the year ended December 31, 2018?
A. 195,000
B. 150,000
C. 120,000
D. 150,000
Page 2 of 2
Prepared by: Generoso Ermoso Western Institute of Technology

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ACCOUNTS RECEIVABLE – MULTIPLE CHOICE

Accounts known to be worthless 100, 000

What is the correct balance of trade accounts receivable?

Accounts receivable, January 1 4,000,000

What is the balance of accounts receivable on December 31?

Trade accounts receivable 2,000,000

Accounts receivable, January 1 1,300,000

Accounts receivable at January 1,300,000

Allowance for doubtful accounts on January 1 280,000

What is the doubtful accounts for the current year?

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