Quiz Ch 05 – Recording Uncollectible-Account Expense in the Direct Write-Off Method
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
When is the Uncollectible-Account Expense recorded under the direct write-off method?
When is the Uncollectible-Account Expense recorded under the direct write-off method?
How is revenue recognized in FOB destination shipments?
What is one way to mitigate the risk of uncollectible receivables?
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?
Which method can accelerate cash collections for retailers?
Each customer has a dedicated accounts receivable account in the general ledger.
Accounts receivable is a type of credit that involves customers signing an agreement to pay a specific amount, including interest, to the business at a future date.
Subsidiary ledgers for accounts receivable display individual customer account separately.
Expected future returns need not be estimated as part of the end-of-period adjusting entries.