Accounting Exam #3 Chapters 8, 9, 10
Exam Questions and Answers Graded A+
What are receivables? - Correct answer-Amounts due from individuals and
companies and claims that are expected to be collected in cash.
Receivables are one of the company's _________ assets. - Correct answer-Largest.
What are accounts receivables? - Correct answer-Amounts customers owe on
account.
What are notes receivables? - Correct answer-A written promise for amounts to be
received.
What are trades receivables? - Correct answer-Notes and accounts receivables that
result from sales transactions.
When does a service organization record accounts receivables? - Correct answer-
When it performs a service on account.
When does a merchandiser record accounts receivables? - Correct answer-At the
point of the sale of merchandise on account.
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,When a merchandiser sells goods, debits (Accounts receivables) and credits (sales
revenue) _____ - Correct answer-Increase.
Sales returns reduce _____ - Correct answer-Receivables.
What should we debit and credit to record a sale on account? - Correct answer-
Debit: Accounts Receivable
Credit: Sales Revenue
What should we debit and credit to record merchandise returned? - Correct answer-
Debit: Sales return and allowances
Credit: Accounts Receivable
What should we debit and credit to record collection of accounts receivable? -
Correct answer-Debit: Cash
Sales Discounts
Credit: Accounts Receivable
What should we debit and credit to record interest on amount due? - Correct
answer-Debit: Accounts Receivable
Credit: Interest Revenue
How long do accounts receivables have to be paid? - Correct answer-30-60 days.
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, How long do notes receivables have to be paid? - Correct answer-60 to 90 days or
longer.
What are the two methods of valuing accounts receivables for uncollectible
accounts? - Correct answer-1. Direct Write off 2. Allowance
How should companies record accounts receivables in their financial statements? -
Correct answer-As an asset.
What is a Bad Debt Expense? - Correct answer-An expense account to record
losses from extending credit.
What is the direct write off method? - Correct answer-A method of accounting for
bad debts that involves charging receivable balances to Bad Debt Expenses at the
time receivables from a particular company are determined to be uncollectible.
What do we debit and credit using the direct write off method? - Correct answer-
Debit: Bad Debt Expense
Credit: Accounts Receivable
The Direct write off method is not acceptable for ______ - Correct answer-
Financial reporting purposes.
What is the allowance method? - Correct answer-A method of accounting for bad
debts that involves estimating uncollectible accounts at the end of each period.
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Exam Questions and Answers Graded A+
What are receivables? - Correct answer-Amounts due from individuals and
companies and claims that are expected to be collected in cash.
Receivables are one of the company's _________ assets. - Correct answer-Largest.
What are accounts receivables? - Correct answer-Amounts customers owe on
account.
What are notes receivables? - Correct answer-A written promise for amounts to be
received.
What are trades receivables? - Correct answer-Notes and accounts receivables that
result from sales transactions.
When does a service organization record accounts receivables? - Correct answer-
When it performs a service on account.
When does a merchandiser record accounts receivables? - Correct answer-At the
point of the sale of merchandise on account.
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,When a merchandiser sells goods, debits (Accounts receivables) and credits (sales
revenue) _____ - Correct answer-Increase.
Sales returns reduce _____ - Correct answer-Receivables.
What should we debit and credit to record a sale on account? - Correct answer-
Debit: Accounts Receivable
Credit: Sales Revenue
What should we debit and credit to record merchandise returned? - Correct answer-
Debit: Sales return and allowances
Credit: Accounts Receivable
What should we debit and credit to record collection of accounts receivable? -
Correct answer-Debit: Cash
Sales Discounts
Credit: Accounts Receivable
What should we debit and credit to record interest on amount due? - Correct
answer-Debit: Accounts Receivable
Credit: Interest Revenue
How long do accounts receivables have to be paid? - Correct answer-30-60 days.
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, How long do notes receivables have to be paid? - Correct answer-60 to 90 days or
longer.
What are the two methods of valuing accounts receivables for uncollectible
accounts? - Correct answer-1. Direct Write off 2. Allowance
How should companies record accounts receivables in their financial statements? -
Correct answer-As an asset.
What is a Bad Debt Expense? - Correct answer-An expense account to record
losses from extending credit.
What is the direct write off method? - Correct answer-A method of accounting for
bad debts that involves charging receivable balances to Bad Debt Expenses at the
time receivables from a particular company are determined to be uncollectible.
What do we debit and credit using the direct write off method? - Correct answer-
Debit: Bad Debt Expense
Credit: Accounts Receivable
The Direct write off method is not acceptable for ______ - Correct answer-
Financial reporting purposes.
What is the allowance method? - Correct answer-A method of accounting for bad
debts that involves estimating uncollectible accounts at the end of each period.
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