of net sale A. Inficates how many times the receivales we soered inte cash durin
ID: 2595356 • Letter: O
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of net sale A. Inficates how many times the receivales we soered inte cash during t n le computed hy diviling verags receivables by sales C. Ielkale, the rverag" "ember of day. business wai" to mak-co-tion on ile falem D Indicetes the propertion of scompany's srcevbile thet the independent Hol the independe.ulkin wwe ao which ofthefollowing statemen" regarding me iskom of enenling ere. " D. Even iHs company were to cofleet i full freom cuslomers, there hough addidtionel cots we incurred if crediu is eeded,ompany expeets thet te ufficient to offiet the dditional costs D. Even if there are no bad des inerease additionai cot.beyond increased revenue froms the credid sales II. Which of the following statements regarding the allwance for duutful acconts is re added to the beginning balance in the A. Under t he aging of accounts receivable method, bed debt expense is caleuleted and then aflowance for doubtfil accounts B. The allowance for doubtful accounts is a contra-revene account C. The allowance for doafiud ecounds is credised when a specific wie-off is recorded D. The allowance for dol econts has a normal credit balance. 12 Which of the following statemenes regarding methods of accounting for bed debts is true A. When the alowance method s used, the journal entry to write-off an uncoflectible accound does not change the amount repored net accounts receivable on the belance sheet B. The two methods of accounting for bad debts that are acceptable under GAAP are the allowance method and the direct write-off method C. When the allowance method is used, if actual results differ from the estimates, the prior year financial statements must be corrected D. When the allowance method is used, bad debt expense is equal to the write-offs that occurred during the period. 13.An allowance for doubtful accounts is a.sontra- account that offiets A. bed debt expene. B. cash C, net income D accounts receivable 14,When an adjusting entry is made in anticipation of some receivables being uncollectible, the adjustment: A. reduces both net income and net accounts receivable. B. reduces net income and increases liabilities C. reduces net accounts receivable and increases liabilities D. reduces net income and selling expenses 15 Companies are concerned about the cost of extending credit for all the following reasons except: A, the time delay in receiving payment. B, the expense of the extra goods that must be produced or bought. C. the risk of nonpeyment D. the administrative costs associated with extending credit.Explanation / Answer
10 C. Even though additional costs are incurred if credit is extended, a company expects that the additional revenue will be more than sufficient to offset the additional costs 11 D. The allowance for doubtful accounts has a normal credit balance. 12 When the allowance method is used, the journal entry to write-off an uncollectible account does not change the amount reported as net accounts receivable on the balance sheet 13 c net income 14 A. both net income and net accounts receivable. 15 B. the expense of the extra goods that must be produced or bought
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