ACC 291T Wk 4 - Practice: Connect Knowledge Check (2021.7 New)

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ACC 291T Wk 4 - Practice: Connect Knowledge Check (2021.7 New)

Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the \$2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of \$2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is:

Multiple Choice

•

Accounts Receivable—A. Hopkins       2,000

Cash       2,000

Accounts Receivable—A. Hopkins            2,000

•

Cash       2,000

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Accounts Receivable—A. Hopkins       2,000

Allowance for Doubtful Accounts      2,000

Cash       2,000

Accounts Receivable—A. Hopkins            2,000

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Allowance for Doubtful Accounts2,000

Accounts Receivable—A. Hopkinse           2,000

Accounts Receivable—A. Hopkins       2,000

Cash            2,000

•

Cash       2,000

Accounts Receivable—A. Hopkins            2,000

Separate accounts receivable information for each customer is important because it reveals all of the following except:

Multiple Choice

•

When the customer intends to pay outstanding balances.

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The basis for sending bills to customers.

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How much each customer still owes.

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How much each customer has paid.

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How much each customer has purchased on credit.

A 90-day note issued on April 10 matures on:

Multiple Choice

•

July 12.

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July 9.

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July 10.

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July 11.

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July 13.

A company receives a 10%, 120-day note for \$1,500. The total interest due on the maturity date is: (Use 360 days a year.)

Multiple Choice

•

\$75.00.

•

\$87.50.

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\$150.00.

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\$50.00.

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\$37.50.

On February 1, a customer's account balance of \$2,300 was deemed to be uncollectible. What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method?

Multiple Choice

•

Debit Allowance for Doubtful Accounts \$2,300; credit Bad Debts Expense \$2,300.

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Debit Bad Debts Expense \$2,300; credit Allowance for Doubtful Accounts \$2,300.

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Debit Accounts Receivable \$250; credit Allowance for Doubtful Accounts \$2,300.

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Debit Allowance for Doubtful Accounts \$2,300; credit Accounts Receivable \$2,300.

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Debit Bad Debts Expense \$2,300; credit Accounts Receivable \$2,300.

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:

Multiple Choice

•

A reduction in equity.

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An increase in the expenses of the current period.

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No effect on the expenses of the current period.

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An increase in current assets.

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A reduction in current liabilities.

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