Quiz Ch 05 – Journal Entry for Uncollectible Accounts in Direct Write-Off Method
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
What journal entry is made under the direct write-off method when an account is considered uncollectible?
What journal entry is made under the direct write-off method when an account is considered uncollectible?
What are the names of the income statement and balance sheet approaches used for estimating uncollectible accounts?
What methods do companies typically use for accounting for uncollectible accounts in interim and year-end financial statements?
What item is included in the numerator when calculating the quick ratio
Using the percent-of-sales method, Seidner Company has credit sales of $1,000,000, sales returns and allowances of $10,000, accounts receivable of $560,000, and an allowance for uncollectible accounts (debit) of $42,000 at year-end. What does the debit balance in the allowance for uncollectible accounts indicate?
Smith Company has credit sales of $1,000,000, sales returns and allowances of $10,000, accounts receivable of $560,000, and an allowance for uncollectible accounts (debit) of $42,000 at year-end. Using the percent-of-sales method, if uncollectible accounts were estimated at 1% of credit sales in the prior year and no year-end adjusting entry has been made for Uncollectible-Account Expense, what action should the company take in regards to uncollectible accounts?
True or false: At the midpoint of an amortized loan’s life, the percentage of the payment assigned to interest must be equal to the percentage designated for principal repayment. This holds true regardless of the loan’s original term or interest rate.
True or false: Around the midpoint of an amortized loan’s life, the portion allotted to interest can vary, either equalling, exceeding, or falling short of the proportion allocated to principal repayment. This variation hinges on the loan’s initial term and the interest rate.
What is the impact of the direct-write off method on net income and total assets of a company in the year of the sale?
Which of the following statements is accurate about the direct write-off method for uncollectible accounts?