ACCT 2301 Final Review Questions Answered Correctly Latest Update 2025-2026
Honoring a note receivable indicates that the maker has: - Answers Paid in full.
If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a
bad debt being written off, the entry to record the write-off against the allowance account
results in: - Answers No effect on the expenses of the current period.
A method of estimating bad debts expense that involves a detailed examination of outstanding
accounts and the length of time past due is the: - Answers Again of accounts receivable method.
Gideon Company uses the allowance method of accounting for uncollectible accounts. On May
3, the Gideon Company wrote off the $2,400 uncollectible account of its customer, A. Hopkins.
The entry or entries Gideon makes to record the write off of the account on May 3 is: - Answers
Allowance for Doubtful Accounts 2,400
Accounts Receivable - A. Hopkins 2,400
Brinker accepts all major banks credit cards, including First Savings Bank's, which assesses a
3% charge on sales for using its card. On May 26, Brinker had $6,700 in First Savings Bank Card
credit sales. What entry should Brinker make on May 26 to record the deposit? - Answers Debit
Cash $6,499; debit credit card expense $201; credit sales $6,700
Uniform Supply accepted a $18,000, 90-day, 8% note from Tracy Janitorial on October 17. What
entry should Uniform Supply make on January 15 of the next year when the note is paid?
(Assume reversing entries are not made). (Use 360 days a year.) - Answers Debit Cash $18,360;
credit Interest Revenue $60; credit Interest Receivable $300; credit Notes Receivable $18,000.
Jasper makes a $30,000, 90-day, 6.0% cash loan to Clayborn Co. Jasper's entry to record the
collection of the note and interest at maturity should be:
(Use 360 days a year.) - Answers Debit Cash $30,450; credit Interest Revenue $450; credit Notes
Receivable $30,000.
At the end of the current year, using the aging of receivable method, management estimated
that $22,500 of the accounts receivable balance would be uncollectible. Prior to any year-end
adjustments, the Allowance for Doubtful Accounts had a debit balance of $600. What adjusting
entry should the company make at the end of the current year to record its estimated bad debts
expense? - Answers Bad Debts Expense 23,100
, Allowance for Doubtful Accounts 23,100
A company uses the percent of sales method to determine its bad debts expense. At the end of
the current year, the company's unadjusted trial balance reported the following selected
amounts:
- Accounts receivable: $387,000 Debit
- Allowance for uncollectible accounts: 620 credit
- Net Sales: 920,000 credit
All sales are made on credit. Based on past experience, the company estimates that 0.6% of net
credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the
year-end adjusting entry is prepared? - Answers $5,520
Jax Recording Studio purchased $8,600 in electronic components from Music World. Jax
signed a 60-day, 12% promissory note for $8,600. Music World's journal entry to record the sales
transaction is: - Answers Debit Notes Receivable $8,600; credit Sales $8,600.
The unadjusted trial balance at year-end for a company that uses the percent of receivables
method to determine its bad debts expense, reports the following selected amounts:
- Accounts receivable $438,000 debit
- Allowance for Doubtful Accounts $1,280 debit
- Net Sales $2,130,000 credit
All sales are made on credit. Based on past experience, the company estimates 2.0% of ending
account receivable to be uncollectible. What adjusting entry should the company make at the
end of the current year to record its estimated bad debts expense? - Answers Debit Bad Debts
Expense $10,040; credit allowance for doubtful accounts $10,040.
A company receives a 10%, 90-day note for $3,900. The total interest due on the maturity date is:
(Use 360 days a year.) - Answers $97.50
Depletion is: - Answers The process of allocating the cost of natural resources to the period
when it is consumed.
The straight-line depreciation method and the double-declining-balance depreciation method: -
Answers Produce the same total depreciation over an asset's useful life.
Honoring a note receivable indicates that the maker has: - Answers Paid in full.
If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a
bad debt being written off, the entry to record the write-off against the allowance account
results in: - Answers No effect on the expenses of the current period.
A method of estimating bad debts expense that involves a detailed examination of outstanding
accounts and the length of time past due is the: - Answers Again of accounts receivable method.
Gideon Company uses the allowance method of accounting for uncollectible accounts. On May
3, the Gideon Company wrote off the $2,400 uncollectible account of its customer, A. Hopkins.
The entry or entries Gideon makes to record the write off of the account on May 3 is: - Answers
Allowance for Doubtful Accounts 2,400
Accounts Receivable - A. Hopkins 2,400
Brinker accepts all major banks credit cards, including First Savings Bank's, which assesses a
3% charge on sales for using its card. On May 26, Brinker had $6,700 in First Savings Bank Card
credit sales. What entry should Brinker make on May 26 to record the deposit? - Answers Debit
Cash $6,499; debit credit card expense $201; credit sales $6,700
Uniform Supply accepted a $18,000, 90-day, 8% note from Tracy Janitorial on October 17. What
entry should Uniform Supply make on January 15 of the next year when the note is paid?
(Assume reversing entries are not made). (Use 360 days a year.) - Answers Debit Cash $18,360;
credit Interest Revenue $60; credit Interest Receivable $300; credit Notes Receivable $18,000.
Jasper makes a $30,000, 90-day, 6.0% cash loan to Clayborn Co. Jasper's entry to record the
collection of the note and interest at maturity should be:
(Use 360 days a year.) - Answers Debit Cash $30,450; credit Interest Revenue $450; credit Notes
Receivable $30,000.
At the end of the current year, using the aging of receivable method, management estimated
that $22,500 of the accounts receivable balance would be uncollectible. Prior to any year-end
adjustments, the Allowance for Doubtful Accounts had a debit balance of $600. What adjusting
entry should the company make at the end of the current year to record its estimated bad debts
expense? - Answers Bad Debts Expense 23,100
, Allowance for Doubtful Accounts 23,100
A company uses the percent of sales method to determine its bad debts expense. At the end of
the current year, the company's unadjusted trial balance reported the following selected
amounts:
- Accounts receivable: $387,000 Debit
- Allowance for uncollectible accounts: 620 credit
- Net Sales: 920,000 credit
All sales are made on credit. Based on past experience, the company estimates that 0.6% of net
credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the
year-end adjusting entry is prepared? - Answers $5,520
Jax Recording Studio purchased $8,600 in electronic components from Music World. Jax
signed a 60-day, 12% promissory note for $8,600. Music World's journal entry to record the sales
transaction is: - Answers Debit Notes Receivable $8,600; credit Sales $8,600.
The unadjusted trial balance at year-end for a company that uses the percent of receivables
method to determine its bad debts expense, reports the following selected amounts:
- Accounts receivable $438,000 debit
- Allowance for Doubtful Accounts $1,280 debit
- Net Sales $2,130,000 credit
All sales are made on credit. Based on past experience, the company estimates 2.0% of ending
account receivable to be uncollectible. What adjusting entry should the company make at the
end of the current year to record its estimated bad debts expense? - Answers Debit Bad Debts
Expense $10,040; credit allowance for doubtful accounts $10,040.
A company receives a 10%, 90-day note for $3,900. The total interest due on the maturity date is:
(Use 360 days a year.) - Answers $97.50
Depletion is: - Answers The process of allocating the cost of natural resources to the period
when it is consumed.
The straight-line depreciation method and the double-declining-balance depreciation method: -
Answers Produce the same total depreciation over an asset's useful life.
