ACCOUNTING QUIZ 3 QUESTIONS AND ANSWERS 2025
At what amount will accounts receivable for Infinity Company be reported on the balance sheet if the
gross receivable balance is $104,000 and the allowance for doubtful accounts is estimated at 4% of gross
receivables? - (ANSWER)$99,840
If a company fails to make an adjusting entry to estimate doubtful accounts, then this error: -
(ANSWER)Overstates Net Income
On December 31, 2016 before adjusting entries, Accounts Receivable for CNN Company had a debit
balance of $400,000, and the Allowance for Doubtful Accounts had a credit balance of $12,000. Credit
sales for the year were $3,200,000. If credit losses are estimated at 1% of credit sales: - (ANSWER)The
balance of the Allowance for Doubtful Accounts will be $44,000 after adjustment.
Assume the following unadjusted account balances at the end of the accounting period for Morgen
Company: Accounts Receivable, $200,000; Allowance for Doubtful Accounts, $2,800 (debit balance); and
Net sales, $2,400,000. If Morgen's past experience indicates credit losses of 1% of net sales, the
adjusting entry to estimate doubtful accounts is: - (ANSWER)Bad Debts Expense 24,000
Allowance for Doubtful Accounts 24,000
Oakpark, Inc.'s $180,000 Accounts Receivable balance at December 31 consisted of $160,000 current
balances and $20,000 past-due balances. At December 31, the Allowance for Doubtful Accounts had a
credit balance of $1,600. Oakpark estimated that 2% of current balances and 15% of past-due balances
will prove uncollectible. The adjusting entry to record credit losses is: - (ANSWER)Bad Debts Expense
4,600
Allowance for Doubtful Accounts 4,600
Southwest Company uses the allowance method of recording credit losses. In November 2016,
Southwest wrote off the $3,600 account of Gamma Company. In January 2017, Gamma paid the $3,600.
The entry or entries to record the payment is/are: - (ANSWER)Accounts Receivable—Gamma Co. 3,600
Allowance for Doubtful Accounts 3,600
At what amount will accounts receivable for Infinity Company be reported on the balance sheet if the
gross receivable balance is $104,000 and the allowance for doubtful accounts is estimated at 4% of gross
receivables? - (ANSWER)$99,840
If a company fails to make an adjusting entry to estimate doubtful accounts, then this error: -
(ANSWER)Overstates Net Income
On December 31, 2016 before adjusting entries, Accounts Receivable for CNN Company had a debit
balance of $400,000, and the Allowance for Doubtful Accounts had a credit balance of $12,000. Credit
sales for the year were $3,200,000. If credit losses are estimated at 1% of credit sales: - (ANSWER)The
balance of the Allowance for Doubtful Accounts will be $44,000 after adjustment.
Assume the following unadjusted account balances at the end of the accounting period for Morgen
Company: Accounts Receivable, $200,000; Allowance for Doubtful Accounts, $2,800 (debit balance); and
Net sales, $2,400,000. If Morgen's past experience indicates credit losses of 1% of net sales, the
adjusting entry to estimate doubtful accounts is: - (ANSWER)Bad Debts Expense 24,000
Allowance for Doubtful Accounts 24,000
Oakpark, Inc.'s $180,000 Accounts Receivable balance at December 31 consisted of $160,000 current
balances and $20,000 past-due balances. At December 31, the Allowance for Doubtful Accounts had a
credit balance of $1,600. Oakpark estimated that 2% of current balances and 15% of past-due balances
will prove uncollectible. The adjusting entry to record credit losses is: - (ANSWER)Bad Debts Expense
4,600
Allowance for Doubtful Accounts 4,600
Southwest Company uses the allowance method of recording credit losses. In November 2016,
Southwest wrote off the $3,600 account of Gamma Company. In January 2017, Gamma paid the $3,600.
The entry or entries to record the payment is/are: - (ANSWER)Accounts Receivable—Gamma Co. 3,600
Allowance for Doubtful Accounts 3,600
