Unit 6 Review

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

Sneakers Snack Shop signed a $80,000, 60-day, 7%, interest-bearing note on July 1. What is the maturity date of the note?

• September 2

• September 1

• August 31

• August 30

Sneakers Snack Shop signed a $30,000.00, 90-day, 8%, interest-bearing note on August 1, 20XX. Using a 360-day year, the maturity value of the note is:

• $30,400.00

• $30,591.78

• $30,600.00

• $32,400.00

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.

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.

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.

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.

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

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.

Bright Lites Electrical Services uses the direct write-off method when handling uncollectible accounts receivable. Taylor Electricians owes $695 on account. Bright Lites Electrical Services determined this account to be uncollectible. The correct entry for writing off this account is:

• debit Accounts Receivable/Taylor Electricians, $695; credit Allowance for Uncollectible Accounts, $695.

• debit Accounts Receivable/Taylor Electricians, $695; credit Uncollectible Accounts Expense, $695.

• debit Uncollectible Accounts Expense, $695; credit Accounts Receivable/Taylor Electricians, $695.

• debit Uncollectible Accounts Expense, $695; credit Allowance for Uncollectible Accounts, $695.