Acct 557 Chapter 9 Quiz
Multiple Choice, Question 39
Interest is usually associated with
bad debts.
doubtful accounts.
accounts receivable.
notes receivable.
Multiple Choice, Question 48
Which of the following would require a compound journal entry?
To record the purchase of merchandise on account.
To record sales on account.
To record purchases of inventory when a discount is offered forprompt payment.
To record collection of accounts receivable when a cash discount istaken.
Multiple Choice, Question 56
If a company fails to record estimated bad debts expense,
expenses are understated.
cash realizable value is understated.
receivables are understated.
revenues are understated.
Multiple Choice, Question 59
The existing balance in Allowance for Doubtful Accounts isconsidered in computing bad debts expense in the
percentage of receivables and percentage of sales basis.
direct write-off method.
percentage of sales basis.
percentage of receivablesbasis.
Multiple Choice, Question 64
An aging of a company’s accounts receivable indicates that $9,000are estimated to be uncollectible. If Allowance for DoubtfulAccounts has a $1,100 credit balance, the adjustment to record baddebts for the period will require a
debit to Bad Debts Expense for $7,900.
debit to Allowance for Doubtful Accounts for $7,900.
credit to Allowance for Doubtful Accounts for $9,000.
debit to Bad Debts Expense for $9,000.
Multiple Choice, Question 68
A reasonable amount of uncollectible accounts is evidence
that the credit policy is too lenient.
of poor judgments on the part of the credit manager.
that the credit policy is too strict.
of a sound credit policy.
Multiple Choice, Question 73
Bad Debts Expense is reported on the income statement as
a contra-revenue account.
an operating expense.
part of cost of goods sold.
reducing gross profit.
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