LIBERTY UNIVERSITY ACCT 211 EXAM 3 STUDY GUIDE | FINANCIAL PRINCIPLES
PRACTICE QUESTIONS & ANSWERS 2026/2027
Sold $6,900 of merchandise (that had cost $4,200) to customers who used their Zisa cards. Zisa
charges a 3% fee - ANS ✔✔debit A/R and credit card fee, credit sales
Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $429
balance in McKee's account was from a credit sale last year. - ANS ✔✔Debit allowance for
doubtful accounts, credit A/R
Received Morris's check in full payment for the June 4 purchase. - ANS ✔✔Debit cash, credit
A/R
Write-off for uncollectible accounts - ANS ✔✔Debit: Allowance for Doubtful Accounts $18,300
Credit: Accounts Receivable $18,300
Allowance Method - ANS ✔✔Matches estimated loss from uncollectible accounts receivable
against the sales they helped produce.
Estimating bad debt under the allowance method - ANS ✔✔Debit-Bad Debts Expense
Credit-Allowance for Doubtful Accounts
Writing off a bad debt under the allowance method - ANS ✔✔debit allowance for doubtful
accounts, credit accounts receivable
Percent of Sales Method - ANS ✔✔Uses a percent of credit sales for the period to estimate bad
debts.
, Percent of accounts receivable - ANS ✔✔uses a percent of total accounts receivable to estimate
bad debts
Aging of accounts receivable - ANS ✔✔Applies increasing percentages to accounts receivable
(classified by days past due) to estimate bad debts.
Percent of accounts receivable formula - ANS ✔✔Accounts receivable x rate = allowance for
doubtful
accounts
Aging of Receivables - ANS ✔✔Accounts receivable (by age) x rate (by age) = allowance for
doubtful accounts
Percent of sales - ANS ✔✔sales x rate = bad debt expense
Interest formula - ANS ✔✔Principal x rate x days/360
Note is dishonored - ANS ✔✔Debit A/R, Credit Interest revenue and N/R
Accrued interest on note receivable - ANS ✔✔Debit interest receivable, credit interest revenue
A/R turnover ratio - ANS ✔✔Net Sales/Avg A/R Net
A company paid $326,000 for property that included land, land improvements, and a building.
The land was appraised at $175,000, the land improvements were appraised at $70,000, and
the building was appraised at $105,000. What is the allocation of costs to the three assets? -
ANS ✔✔Land, $163,000; Land Improvements, $65,200; Building, $97,800
PRACTICE QUESTIONS & ANSWERS 2026/2027
Sold $6,900 of merchandise (that had cost $4,200) to customers who used their Zisa cards. Zisa
charges a 3% fee - ANS ✔✔debit A/R and credit card fee, credit sales
Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $429
balance in McKee's account was from a credit sale last year. - ANS ✔✔Debit allowance for
doubtful accounts, credit A/R
Received Morris's check in full payment for the June 4 purchase. - ANS ✔✔Debit cash, credit
A/R
Write-off for uncollectible accounts - ANS ✔✔Debit: Allowance for Doubtful Accounts $18,300
Credit: Accounts Receivable $18,300
Allowance Method - ANS ✔✔Matches estimated loss from uncollectible accounts receivable
against the sales they helped produce.
Estimating bad debt under the allowance method - ANS ✔✔Debit-Bad Debts Expense
Credit-Allowance for Doubtful Accounts
Writing off a bad debt under the allowance method - ANS ✔✔debit allowance for doubtful
accounts, credit accounts receivable
Percent of Sales Method - ANS ✔✔Uses a percent of credit sales for the period to estimate bad
debts.
, Percent of accounts receivable - ANS ✔✔uses a percent of total accounts receivable to estimate
bad debts
Aging of accounts receivable - ANS ✔✔Applies increasing percentages to accounts receivable
(classified by days past due) to estimate bad debts.
Percent of accounts receivable formula - ANS ✔✔Accounts receivable x rate = allowance for
doubtful
accounts
Aging of Receivables - ANS ✔✔Accounts receivable (by age) x rate (by age) = allowance for
doubtful accounts
Percent of sales - ANS ✔✔sales x rate = bad debt expense
Interest formula - ANS ✔✔Principal x rate x days/360
Note is dishonored - ANS ✔✔Debit A/R, Credit Interest revenue and N/R
Accrued interest on note receivable - ANS ✔✔Debit interest receivable, credit interest revenue
A/R turnover ratio - ANS ✔✔Net Sales/Avg A/R Net
A company paid $326,000 for property that included land, land improvements, and a building.
The land was appraised at $175,000, the land improvements were appraised at $70,000, and
the building was appraised at $105,000. What is the allocation of costs to the three assets? -
ANS ✔✔Land, $163,000; Land Improvements, $65,200; Building, $97,800
