6. A check for $ 275 is incorrectly recorded by a company as $ 257. |
On the bank reconciliation, the $ 18 error should be |
a. |
Added to the balance per books. |
b. |
Deducted from the balance per book. |
c. |
Added to the balance per bank. |
d. |
Deducted from the balance per bank. |
7. The Allowance for Doubtful Accounts is necessary because a. when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay. b. uncollectible accounts that are written off must be accumulated in a separate account. c. a liability results when a credit sale is made. d. management needs to accumulate all the credit losses over the years. 8. Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited a. when a credit sale is past due. b. at the end of each accounting period. c. whenever a pre-determined amount of credit sales have been made. d. when an account is determined to be uncollectible 9. Manning Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $ 200,000 and credit sales are $ 1,000,000. Management estimates that 5 % of accounts receivable will be uncollectible. What adjusting entry will Manning Company make if the Allowance for Doubtful Accounts has a credit balance of $ 2,000 before adjustment? a. Bad Debts Expense 10,000 Allowance for Doubtful Accounts 10,000 b. Bad Debts Expense 8,000 Allowance for Doubtful Accounts 8,000 c. Bad Debts Expense 8,000 Accounts Receivable 8,000 d. Bad Debts Expense 10,000 Accounts Receivable 10,000
10. The receivables turnover ratio