Which of the following statements is FALSE? An entry to write off an uncollectible account does not change the net realizable value of AR. Recording bad debt expense will affect total assets. The maturity value of a note is it’s principal plus interest. A credit memo will reduce a company's cash balance. If a company's accounts receivable are a material amount, the company must use the allowance method. A. В. С. D. Е.

Which of the following statements is FALSE? An entry to write off an uncollectible account does not change the net realizable value of AR. Recording bad debt expense will affect total assets. The maturity value of a note is it’s principal plus interest. A credit memo will reduce a company's cash balance. If a company's accounts receivable are a material amount, the company must use the allowance method. A. В. С. D. Е.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 9MC: Which method delays recognition of bad debt until the specific customer accounts receivable is...

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Which method delays recognition of bad debt until the specific customer accounts receivable is identified? A. income statement method B. balance sheet method C. direct write-off method D. allowance method
If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?a. It violates the matching principle. b. It will record bad debts only when an account is determined to be uncollectible. c. It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts. d. It will report accounts receivable in the balance sheet at their net realizable value.
1. When using the Allowance method to account for uncollectible accounts, between the income statement approach and the balance sheet approach, which is more accurate in your opinion? Fully support your answer with sound research. 2. Can the Allowance account be used to misinterpret a company's financial results? How so? Provide at least one example of how a company might accomplish this. 3. Suppose a company accepts a Note Receivable in lieu of an Accounts Receivable. How would the company record this transaction? Provide an example and related journal entry. (You may not use the examples from the textbook.)
Which statement is false? a. The amount of Accounts Receivable pledged should be excluded from Accounts Receivable in the balance sheet. b. When Accounts Receivable are assigned on a notification basis, the company reduces liability and Accounts Receivable account for the net amount of collections of Accounts Rceivable. c. In factoring Accounts Receivable as a continuing agreement, the buyer of Accounts Receivable protects himself from risks arising from discounts, returns and allowances thru by withholding a portion of the amount of accounts receivable. e. none of the above Please explain.
Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be a. debit Allowance for Doubtful Accounts; credit Accounts Receivable b. debit Bad Debt Expense; credit Allowance for Doubtful Accounts C. debit Bad Debt Expense; credit Accounts Receivable Od. debit Accounts Receivable; credit Notes Receivable
If the maker of a promissory note fails to pay the note on the due date, the note is said to bea.displacedb.disallowedc.discountedd.dishonored If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer’s account as uncollectible? a.Bad Debt Expenseb.Uncollectible Accounts Receivablec.Accounts Receivabled.Allowance for Doubtful Accounts Selling receivables is calleda.sold receivablesb.factoringc.sales revenued.a facto
When using the allowance method for accounting for bad debts, accounts receivable is reported on the balance sheet at the expected net realizable value. When a particular receivable from a customer ultimately is determined to be uncollectible and is written off, the recording of this event will Group of answer choices A)decrease the net realizable value of the accounts receivable. B)have an effect that is not determinable from the information given. C)increase the net realizable value of the accounts receivable. D)decrease total current assets. e)None of the above
This is a method of recognizing bad debts that requires a company to estimate the uncollectible accounts rather than wait for an account to actually be identified as uncollectible. Direct write-off method O Allowance method
When a large account receivable balance is due from one client it is logical to use the direct write-off method to adjust the bad debt expense and accounts receivable balance. Under different circumstances, another method is used called the allowance method. Discuss the best reason(s) for using the allowance method and give some examples of companies that are likely to use that method. Also explain why it would ever be appropriate to use the direct write-off method, especially since it is not GAAP.
When a large account receivable balance is due from one client it is logical to use the direct write-off method to adjust the bad debt expense and accounts receivable balance. Under different circumstances, another method is used called the allowance method. Discuss the best reason(s) for using the allowance method and give some examples of companies that are likely to use that method. Also explain why it would ever be appropriate to use the direct write-off method, especially since it is not GAA
Which among the statements is not correct? a. Net realizable value of accounts receivable results when accounts receivable is reduced by allowance for doubtful accounts b. Credit balances in accounts receivable arising from customer's advances should be excluded from accounts receivable c. The allowance method of recording bad debt loss is the one consistent with accrual accounting. d. answer not given
Which of the following concepts relates to using the allowance method in accounting for accounts receivable? Bad debt expense is management's determination of which accounts will be sent to the attorney for collection. а. O b. Bad debt expense is an estimate that is based on historical and prospective information. Ос. Bad debt expense is an estimate that is based only on an analysis of the receivables ageing. O d. Bad debt expense is based on the actual amounts determined to be uncollectible.