Question 1 of 20 0.0/ 5.0 points under the allowance method, bad debt

Question 1 of 20

0.0/ 5.0 Points

Under the allowance method, Bad Debt Expense is recorded

[removed] A. as an estimate.
[removed] B. when an individual account is written off.
[removed] C. several times during the year as needed.
[removed] D. None of the above

Question 2 of 20

0.0/ 5.0 Points

Which amount does not change during the period and is added to purchases when computing the cost of goods available for sale?

[removed] A. Beginning inventory
[removed] B. Ending inventory
[removed] C. Periodic inventory
[removed] D. Freight-in

Question 3 of 20

0.0/ 5.0 Points

Which method uses an aging of Accounts Receivable to calculate the Bad-Debts Expense?

[removed] A. Income statement approach
[removed] B. Balance sheet approach
[removed] C. Aging the Accounts Receivable
[removed] D. Direct write-off

Question 4 of 20

0.0/ 5.0 Points

The ending Merchandise Inventory account appears in the _______ on the worksheet.

[removed] A. adjusted trial balance and balance sheet columns
[removed] B. adjustment column
[removed] C. adjustment, adjusted trial balance, and income statement columns
[removed] D. adjustment, adjusted trial balance, and balance sheet column

Question 5 of 20

0.0/ 5.0 Points

When using a periodic inventory method, which account is increased when you buy merchandise inventory?

[removed] A. Cost of Goods Sold
[removed] B. Beginning Inventory
[removed] C. Ending Inventory
[removed] D. Purchases

Question 6 of 20

0.0/ 5.0 Points

Which of these is true about the normal balance of an income summary?

[removed] A. The balance is debit.
[removed] B. The balance is credit.
[removed] C. The account doesn’t have a normal balance.
[removed] D. It depends on which financial statement it appears.

Question 7 of 20

0.0/ 5.0 Points

Net realizable value can be defined as the

[removed] A. Gross Accounts Receivable.
[removed] B. Current Bad Debts Expense.
[removed] C. amount of Accounts Receivable you don’t expect to collect.
[removed] D. Gross Accounts Receivable minus the Allowance for Doubtful Accounts.

Question 8 of 20

5.0/ 5.0 Points

The beginning Merchandise Inventory account appears in the _______ on the worksheet.

[removed] A. adjustment column
[removed] B. trial balance and the balance sheet columns
[removed] C. trial balance and adjustment columns
[removed] D. All of the above

Question 9 of 20

0.0/ 5.0 Points

Indy Sport and Hobby’s Allowance for Doubtful Accounts had an unadjusted credit balance of $400. The manager estimates that $900 of the Accounts Receivable is uncollectible. Using the balance sheet approach, the year-end adjusting entry for Bad-Debts Expense includes a

[removed] A. credit to the Bad-Debt Expense account for $500.
[removed] B. debit to the Bad-Debts Expense account for $900.
[removed] C. credit to the Bad-Debts Expense account for $1,300.
[removed] D. debit to the Bad-Debts Expense account for $500.

Question 10 of 20

5.0/ 5.0 Points

Cost of goods sold equals

[removed] A. beginning inventory + net purchases + freight-in + ending inventory.
[removed] B. beginning inventory – net purchases – freight-in + ending inventory.
[removed] C. beginning inventory + net purchases + freight-in – ending inventory.
[removed] D. beginning inventory – net purchases + freight-in + ending inventory.

Question 11 of 20

5.0/ 5.0 Points

Which inventory appears in the balance sheet column of the worksheet?

[removed] A. Ending inventory
[removed] B. Beginning inventory
[removed] C. Combination of beginning and ending inventories
[removed] D. None of the above

Question 12 of 20

5.0/ 5.0 Points

Beginning and ending inventories for Webster’s Books are $9,000 and $6,000, respectively. The debit amounts (not including Income Summary) in the income statement columns of the worksheet total $14,000, and the credit amounts (not including Income Summary) total $15,500. The firm has a

[removed] A. net income of $1,500.
[removed] B. net loss of $1,500.
[removed] C. net loss of $3,000.
[removed] D. net income of $3,000.

Question 13 of 20

0.0/ 5.0 Points

At the start of the year, Northern Lights had $8,000 worth of merchandise. What do we know about Northern Lights?

[removed] A. It’s a service business.
[removed] B. It’s a retail business.
[removed] C. The company ended with a net income last year.
[removed] D. The company ended with a net loss last year.

Question 14 of 20

5.0/ 5.0 Points

Which type of account is an Allowance for Doubtful Accounts?

[removed] A. Asset
[removed] B. Contra-asset
[removed] C. Revenue
[removed] D. Contra-revenue

Question 15 of 20

0.0/ 5.0 Points

Using the aging method, estimated uncollectible accounts are $3,000. If the balance in the Allowance for Doubtful Accounts is a $600 credit before adjustment, what is the Bad-Debts Expense adjustment for the period?

[removed] A. $3,000
[removed] B. $600
[removed] C. $2,400
[removed] D. $3,600

Question 16 of 20

0.0/ 5.0 Points

Harry’s Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible. Barber calculates Bad-Debts Expense using the

[removed] A. income statement approach.
[removed] B. direct write-off method.
[removed] C. balance sheet approach.
[removed] D. aging the Accounts Receivable approach.

Question 17 of 20

0.0/ 5.0 Points

On December 31, 2012, Brooke’s Horse Stable’s unadjusted Allowance for Doubtful Accounts showed a debit balance of $432. An aging of the Accounts Receivable indicates probable uncollectible accounts of $1,000. The year-end adjusting entry for Bad-Debts Expense includes a

[removed] A. debit to the Allowance account for $568.
[removed] B. credit to the Allowance account for $42.
[removed] C. debit to the Allowance account for $822.
[removed] D. credit to the Allowance account for $1,432.

Question 18 of 20

0.0/ 5.0 Points

An account never used in a service business is

[removed] A. Consulting Fees-Revenue.
[removed] B. Interest Payable.
[removed] C. Merchandise Inventory.
[removed] D. Accumulated Depreciation–Equipment.

Question 19 of 20

0.0/ 5.0 Points

Fit City estimates it will collect $2,300 of the $2,425 owed by customers. The difference of $125 represents the

[removed] A. Gross Accounts Receivable.
[removed] B. Allowance for Doubtful Accounts.
[removed] C. Net Realizable Value.
[removed] D. Value of the Current Unpaid Receivables.

Question 20 of 20

0.0/ 5.0 Points

Beginning merchandise inventory would be found on the worksheet in the

[removed] A. income statement debit column.
[removed] B. income statement credit column.
[removed] C. balance sheet debit column.
[removed] D. balance sheet credit column.

Question 1 of 20 0.0/ 5.0 points under the allowance method, bad debt

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