ACC 556 ASSIST Start With a Dream /acc556assist.com ACC 556 ASSIST Start With a Dream /acc556assist.co | Page 23

Question 11
When an account is written off using the allowance method, the
Question 1
An aging of accounts receivable schedule is based on the premise that
the longer the period an account remains unpaid, the greater the
probability that it will eventually be collected.
Question 2
Allowance for Doubtful Accounts is a contra account that is deducted
from Accounts Receivable on the balance sheet.
Question 3
Under the allowance method, Bad Debt Expense is debited when an
account is deemed uncollectible and must be written off.
Question 4
Interest on a 6-month, 10 percent, $10,000 note is calculated by
multiplying $10,000 ´ 0.10 ´ 6/12.
Question 5
If a company has significant concentrations of credit risk, it must
discuss this risk in the notes to its financial statements.
Question 6
Interest is usually associated with
Question 7
On January 15, Nifty Company sells merchandise on account to
Martinez Associates for $3,000 with terms 3/10, n/30. On January 20,
Martinez returns merchandise worth $600 to Nifty. On January 24,
payment is received from Martinez for the balance due. What is the
amount of cash received?
Question 8