TRUE/FALSE 1) The accounts receivable method to estimate bad debts obtains the e
ID: 2584111 • Letter: T
Question
TRUE/FALSE 1) The accounts receivable method to estimate bad debts obtains the estimated balance in the Allowance for Doubtful Accounts in one of two ways: (1) computing the percent uncollectible from the total accounts receivable or (2) aging accounts receivable. 1) 2) The expense recognition (matching) principle requires that accrued interest on outstanding notes receivable be recorded at the end of each accounting period. 2) . 3) A company borrowed $10,000 by signing a 180-day promissory note at 10%. The maturity value of the note is $11,000 4) For legal reasons, it is not advisable to accept a note receivable in exchange for an overdue account receivable. 4) 5) The aging method of determining bad debts expense is based on the knowledge that the longer a receivable is past due, the higher the likelihood of collection. 5) Problem 6) A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a $900 debit. The journal entry to record the adjustment would be for what dollar amount? TRUE/FALSE. 7) The percent of sales method for estimating bad debts uses only income statement account balances to estimate bad debts. 7) 8) Notes receivable are classified as current asset regardless of the time to maturity. ) Problem 9) Uniform Supply accepted a S4 ,800, 90-day, 9% note from Tracy Janitorial on October 17·The accrued interest on the note on Dec 31 is? TRUE/FALSE 10) When using the allowance method of accounting for uncollectible accounts, the recovery of a bad debt would be recorded as a debit to Cash and a credit to Bad Debts Expense, 10)-Explanation / Answer
10, Under allowance method, Estimated amouont of bad debts will be debited to bad debt expense account and credited to provision for bad and doubtful debts. As and when bad debts are crystalized, Accounts receivable will be reduced.
Hence, Given statement is False.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.