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Using the percentage-of-sales method, you estimate that total uncollectible accounts are

 Using the percentage-of-sales method, you estimate that total uncollectible accounts are $4,500. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $1,400. The amount of the adjusting entry is:

A) $5,900

B) $4,500

C) $3,100

D) $1,400

22) Using the percentage-of-sales method, you estimate that total uncollectible accounts are $4,500. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,400. The amount of the adjusting entry is:

A) $1,400

B) $3,100

C) $4,500

D) $5,900

23) Under the allowance method, if bad debt write-offs during the year exceed the allowance amount, the balance in Allowance for Uncollectible Accounts at year end prior to adjustment:

A) should be deducted from Accounts Receivable

B) will be zero

C) will be a debit

D) should be adjusted by debiting it to bring the balance back to zero

24) Using the aging-of-accounts-receivable method to estimate uncollectible receivables, CMU Corporation estimates that $3,750 of its accounts receivable will be uncollectible. Prior to adjustment, the Allowance for Uncollectible Accounts has a credit balance of $600. Uncollectible account expense to be reported on the income statement is:

A) $4,350

B) $3,750

C) $3,150

D) $600

25) Smart-T Corporation uses the aging-of-accounts-receivable method to estimate uncollectible receivables.  At year end Smart-T estimates that $4,750 of its accounts receivable will be uncollectible. Prior to adjustment, the Allowance for Uncollectible Accounts has a credit balance of $200. Uncollectible account expense to be reported on the income statement is:

A) $4,750

B) $4,950

C) $4,550

D) $200

26) Using the aging-of-accounts-receivable method to estimate uncollectible receivables, Records Management Corp. estimates that $8,000 of its accounts receivable will be uncollectible. Prior to adjustment, the Allowance for Uncollectible Accounts has a debit balance of $2,000. Uncollectible account expense to be reported on the income statement is:

A) $10,000

B) $8,000

C) $6,000

D) $2,000

27) The direct write-off method does not meet the requirements of the:

A) matching principle

B) revenue recognition principle

C) full disclosure principle

D) historical cost principle

28) Lifecycle Management Corporation uses the percentage-of-sales method to estimate uncollectible receivables. Net credit sales for the current year amount to $2,000,000 and management estimates 5% will be uncollectible. Allowance for doubtful accounts prior to adjustment has a credit balance of $10,000. The amount of expense reported on the income statement will be:

A) $110,000

B) $100,000

C) $90,000

D) $10,000

29) When an account is written off using the direct write-off method, total assets will:

A) remain the same

B) increase

C) decrease

D) cannot be determined

30) Livelink Incorporated use the percentage-of-sales method to estimate uncollectible receivables. Net credit sales for the current year amount to $1,000,000 and management estimates 3% will be uncollectible. Allowance for Doubtful Accounts prior to adjustment has a debit balance of $1,900. The amount of expense reported on the income statement will be:

A) $31,900

B) $30,000

C) $28,100

D) $1,

Dec 07 2019 View more View Less

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