Accounting 6.0 Test Review

Creative Art Supplies purchased a paint display case on March 1, 2019, for $1,350. The estimated salvage (disposal) value is $150 and the estimated useful life is five years. What is the depreciation expense for 2019?

• $180

• $200

• $220

• $225

On Your Mark Writing Supplies received a check for $225.00 from Pen & Paper, whose account was previously written off. On Your Mark Writing Supplies uses the Allowance Method for uncollectible accounts. The correct entry to re-open the account for Pen & Paper is:

• debit Accounts Receivable/Pen & Paper, $225.00; credit Allowance for Uncollectible Accounts, $225.00.

• debit Accounts Receivable/Pen & Paper, $225.00; credit Uncollectible Accounts Expense, $225.00.

• debit Uncollectible Accounts Expense, $225.00; credit Accounts Receivable/Pen & Paper, $225.00.

• debit Uncollectible Accounts Expense, $225.00; credit Allowance for Uncollectible Accounts, $225.00.

Of the current year's sales, $2,100 will eventually be uncollectible. The Allowance for Uncollectible Accounts balance is $350. The journal entry for recording the adjustment for uncollectible accounts, based on the percent of sales method, is:

• debit Uncollectible Accounts Expense, $1,750; credit Allowance for Uncollectible Accounts, $1,750.

• debit Uncollectible Accounts Expense, $2,100; credit Allowance for Uncollectible Accounts, $2,100.

• debit Allowance for Uncollectible Accounts, $1,750; credit Uncollectible Accounts Expense, $1,750.

• debit Allowance for Uncollectible Accounts, $2,100; credit Uncollectible Accounts Expense, $2,100.

Steve’s Auto Parts purchased a cash register on January 1, 20XX for $2,500. The estimated salvage (disposal) value is $100, and the estimated useful life is 10 years. What is the annual depreciation expense?

• $100

• $125

• $240

• $250

Steve’s Auto Shop uses the direct write-off method when handling uncollectible accounts receivable. John Taylor owes $375 on account. Steve’s Auto Shop has determined this account to be uncollectible. The correct entry for writing off this account is:

• debit Accounts Receivable/John Taylor, $375; credit Uncollectible Accounts Expense, $375.

• debit Accounts Receivable/John Taylor, $375; credit Allowance for Uncollectible Accounts, $375.

• debit Uncollectible Accounts Expense, $375; credit Accounts Receivable/John Taylor, $375.

• debit Uncollectible Accounts Expense, $375; credit Allowance for Uncollectible Accounts, $375.

Western Textile Company estimates uncollectible accounts expense by calculating a percentage of total sales on account. Total sales on account for the year are $5,275,000.00. In the past, actual uncollectible accounts expense has been about 1% of total sales on account. What is the estimated uncollectible accounts expense for the year?

• $52.75

• $527.50

• $5,275.00

• $52,750.00

Grandfather Tours signed a $12,000, 180-day note at 9% on March 1. Grandfather Tours uses a 360-day year. Using this information, what is the maturity date of the note payable?

• August 27

• August 28

• August 29

• August 30

Western Textile Company estimates its uncollectible accounts expense for the year to be $3,575. The correct entry to record the estimated uncollectible accounts expense is:

• debit Uncollectible Accounts Expense, $3,575; credit Accounts Receivable, $3,575.

• debit Uncollectible Accounts Expense, $3,575; credit Allowance for Uncollectible Accounts, $3,575.

• debit Accounts Receivable, $3,575; credit Uncollectible Accounts Expense, $3,575.

• debit Allowance for Uncollectible Accounts, $3,575; credit Uncollectible Accounts Expense, $3,575.

High Country Apparel signed a $75,000, two-year, interest-bearing, 5% note on October 1, 20XX. The maturity value of the note is:

• $75,000.

• $78,750.

• $80,000.

• $82,500.

Sports Warehouse received a payment in the amount of $697.50 for a note receivable. Interest on the note receivable was $47.50. The journal entry to record the receipt of payment of the note receivable is:

• debit Cash, $697.50; credit Accounts Receivable, $697.50.

• debit Accounts Receivable, $697.50; credit Cash, $697.50.

• debit Cash, $697.50; credit Interest Income, $47.50, Notes Receivable, $650.00.

• debit Cash, $650.00, Interest Expense, $47.50; credit Accounts Receivable, $697.50.