Financial Accounting MULTIPLE CHOICE ) A company uses the percent unadjusted tri

Question

Financial Accounting MULTIPLE CHOICE ) A company uses the percent unadjusted trial balance reported the follewing selected amounts of sales method to devermine i ts bad debits expense. At the end of the wem year,the company's $375,000 debit All sales ar, male om credit. Based on pai esperience, the company estimane an·ofn" cred" sain ntin va. amount should be ited to Bad Debts Expense when the year-end ogusting entry is prepared? A) S1,275 B)S5,500 C)$4,800 D)1,775 E)$4,500 2) A 90-day note issaed on April 10 matures on2) A) July 11. B July C) July 13.D) July 1EJuly 12 3) Which of the following events woald cause a bank to debit a depositor's account? 3) A) The depositor orders new checks through the bank at a cost of sso. B) There are outstanding chocks drawn on the account at month-end C) There are deposits in transit on the account at month-end D) The bank corrects an error from previous month by adding $75 to the depositor accon E) The bank collects a note receivable and related interest on the depositor's behalf 4) Doughton Furnitare Company purchased merchandise on credit from Furniture Supply for $8,000. Two days later Doughton returned $2,000 of the merchandise due to damage. When Doughton pays for the merchandise minas the returs, it would record the payment in the: 4) A) General journal. B) Purchases journal. C) Cash receipts journal. D) Accounts Payable controlling account. E) Cash disbursements journal 5) Cash equivalents meet all of the following criteria except: 5) A) Short-term investments purchased within 3 months of their maturity dates B) Short-term U.S. treasury bills. C) Have a market value that is not sensitive to interest rate changes. D) Readily convertible to a known cash amount E) More liquid than cash 6) A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debi balance of S375 What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? 6), A) Accounts Receivable 15,750 Bad Debts Expense 16,125 les B) Bad Debts Expense Allowance for Doubtful Accounts 16,125 16,125

Explanation / Answer

SOLUTION

24, Correct option -

$2,600 in the Accounts Receivable Dr./Sales Cr. column and $1,700 in the Cost of Goods Sold Dr./Inventory Cr. column.

16, There will be two entries-

S.No.

Accounts title and Explanations

Debit ($)

Credit ($)

1.

Accounts Receivable

2,600

Sales

2,600

2.

Cost of goods sold

1,700

Inventory

1,700

The Following Entry will be made at the time of writing off of Uncollectable account:

Date

Account Title and Expalnation

Debit

Credit

May 03

Allowance for Doubtful account

$ 2,000

To Accounts Receivable _ A . Hopkins

$ 2,000

Being Accounts Receivable from A Hopkins written off

The following entry will be made at the time Recovery of bad debt:

Date

Account Title and Expalnation

Debit

Credit

July 10

Accounts Receivable _ A . Hopkins

$ 2,000

To Allowance for Doubtful account

$ 2,000

Being Reversal of Journal entry made earlier

Cash Account

$ 2,000

To Accounts Receivable _ A . Hopkins

$ 2,000

Being Receipt of cash from Accounts Receivable_A Hopkins

23, Journal entry to record the expenses will be

Delivery exp 43

Merchandise inv 127

Miscellaneous exp 12

Cash 182.

Note: $18 is still in petty cash fund,

So the journal entry to record the reimbursement of account includes a credit to cash $182.

Answer is C.

20, Journal Entry

Cash A/c                                         42,000

Accumulated depreciation                 40,000

Loss on sale of machinery                  5,000

              To Machiner   A/c                                      87,000

Answer:

The journal entry of sale includes:   d) A debit to Cash :   42,000/-

S.No.

Accounts title and Explanations

Debit ($)

Credit ($)

1.

Accounts Receivable

2,600

Sales

2,600

2.

Cost of goods sold

1,700

Inventory

1,700

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