25 A high accounts receivable turnover ratio indicates: a the company is taking
ID: 2552714 • Letter: 2
Question
25 A high accounts receivable turnover ratio indicates:
a the company is taking longer to sell inventory.
b customers are making payments very quickly.
c a large proportion of the company's sales are on credit.
d the company's sales are increasing.
23 The balance of the Allowance for Doubtful Accounts was $12,656 at the beginning of the year and $14,348 at the end of the year. Bad Debt Expense was $3,879 for the year. Recoveries in the amount of $100 were recorded during the year. Which of the following statements is correct?
a The Allowance for Doubtful Accounts account was debited for $2,287 to record write-offs during the year.
b The Allowance for Doubtful Accounts account was retroactively debited for $2,187 to record additional bad debts that became apparent in a future time period.
c The Allowance for Doubtful Accounts account was credited $2,287 for payments from customer whose account balances were previously written off.
d The Allowance for Doubtful Accounts account was credited $2,187 for the difference between the percent of credit sales method and the aging of accounts receivable method.
22. Your business purchased an investment security on April 1 that will pay $90 interest on June 30. Which of the following adjusting entries would be made on April 30?
a Debit Interest Revenue and credit Interest Receivable for $90
b Debit Interest Revenue and credit Interest Receivable for $30
c Debit Interest Receivable and credit Interest Revenue for $90
d Debit Interest Receivable and credit Interest Revenue for $30
Explanation / Answer
25.
High Accounts receivable turnover is an indication of strong credit collections
The answer is - B
23.
Accounts receivable written off = Beginning Allowance for Doubtful accounts + Bad debt expenses + Bad debt recoveries - Ending Allowance for Doubtful accounts
= 12,656 + 3,879 + 100 - 14,348
= 2,287
The answer is A
22.
The answer is D.
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