Accounting I - 6

Customers or Notes Receivable that result from sales transactions (financial relation) are often called as

• non-trade receivables.

• trade receivables.

• merchandise receivables.

• sales receivables.

Notes or accounts receivable from officers, employees, or affiliated companies should be reported on the balance sheet

• As assets, either current or noncurrent

• As noncurrent assets only.

• As trade notes and accounts receivable if they otherwise qualify as current assets.

• As offsets to capital.

When does an receivable become uncollectible?

• when the debtor fails to pay an account according to a sales contract

• when the debtor fails to pay a note on the due date

• there is no general rule for when an account becomes uncollectible

• at the end of the fiscal year

The type of account and normal balance of Provision For Doubtful Trade Receivables is

• regulatory, credit

• liability, credit

• asset, debit

• expense, debit

Which of the following transactions would take place in the journal when a customer buys a good or service on credit?

• Sales account is debited; cash account is credited

• Customers account is debited; cash account is credited

• Customers account is debited; sales return account is credited

• Customers account is debited; sales account is credited

Which of the following terms defines when a customer buys a good or service on credit and agrees to pay at a later date?

• Subsidiary ledger

• operating activities

• Customers

• Direct write- off approach

Which of the following is a balance sheet account which reduces the reported amount of trade receivables?

• Provision for doubtful trade receivables

• Allowance for tax credits

• Schedule of bad debts

• Schedule of accounts receivable

Which of the following transactions would take place when an account becomes uncollectible?

• Bad debts account is debited; accounts receivable is credited

• Accounts receivable account is debited; sales return account is credited

• Accounts receivable account is debited; an allowance for doubtful accounts is credited

• Provision for doubtful trade receivables accounts is debited; doubtful trade receivable is credit

Which of the following transactions would take place in the journal when a provision is allocated for doubtful receivables at the end of the period?

• Sales account is debited; cash account is credited

• Sales return account is debited; cash account is credited

• Accounts receivable account is debited; doubtful trade receivable account is credited

• Provision expenses account is debited; provision for doubtful trade receivable is credited

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

• Uncollectible Accounts Expense

• Allowance for Doubtful Accounts

• Accounts Receivable

• Interest Expense