IntAcc - Chapter 5 Estimation of Doubtful Accounts exam with correct answers 2024

aging of accounts receivable - answer-method of estimating doubtful accounts that invovles analyzing accounts receivable according to when they are due percent of accounts receivable method - answer-a method used to estimate uncollectible accounts receivable that uses an analysis of accounts receivable to estimate the amount that will be uncollectible percent of sales method - answer-a method of estimating uncollectible receivables that calculates bad debts expense based on a percentage of net credit sales Aging accounts receivable Percent of Accounts Receivable Percent of sale - answer-3 methods of estimating Doubtful Accounts past due - answer-Refers to the period beyond the maximum credit sales. False. Percent of ACCOUNTS RECEIVABLE method violates the principle of matching bad debts loss against the sales revenue - answer-True/False: Percent of sales method violates the principle of matching bad debts loss against the sales revenue Proper matching of cost against revenue - answer-What is achieved in percent of sales method? allowance for d/a, end add a/r deemed worthless and writtenoff (if there is any) less a/r recovered (if there is any) less allowance for d/a, beg or sales less sales returns multiplied by the estimated rate uncollectible - answer-to compute for the doubtful accounts expense Answer: P100,000 3,000,000 x 3% = 90,000 90,000 + 10,000 = 100,000 * note: the allowance for doubtful accounts has a debit balance that is why it is added. However, if it has a normal balance of credit, it is deducted. - answer-Jazzy Company reported the following unadjusted balances at the year-end A/R - Debit balance of P3,000,000 Allowance for Doubtful Accounts - Debit bal of P3,000,000 The entity estimated that 3% of gross a/r would be uncollectible. What amount should be reported as doubtful accounts expense? beginning trade a/r multiplied by discount rate = sales discount multiplied by the % of the customers who took advantage of the discount = allowance for sales discount at year-end - answer-to compute for allowance for sales discount at year-end