ACG 2071 Chapter 9 Exam Questions with Correct Answers
Question 1:
Notes and accounts receivable that result from sales transactions are sometimes called trade
receivables.
The category of "Other Receivables" does not include
Answer:
trade receivables.
Question 2:
The direct write-off method is required
Answer:
for federal income tax purposes.
Question 3:
Establishing an Allowance for Doubtful Accounts under the allowance method is necessary
because
Answer:
estimates must be made when recording bad debt expense and it is not possible to know which
specific accounts will not be collected.
Question 4:
Which of the following methods and bases of accounting for uncollectible accounts receivable is
inconsistent with the proper application of matching?
Answer:
Direct write-off method
Question 5:
A primary weakness of the direct write-off method is that
Answer:
the expense of a bad debt is not matched to the period that generated the uncollectible sale
amount.
, Question 6:
An account receivable that has been written off against the allowance account
Answer:
may be collected later.
may be reinstated by an entry that reverses the write-off. may be paid in cash and recorded as
a receipt on account.
*all the choices are correct*
Question 7:
The estimate of uncollectible accounts is based on all of the following except
Answer:
monthly cash expenses.
Question 8:
Allowance for Doubtful Accounts will have
Answer:
an unadjusted credit balance at the end of the period if the write-offs during the period were
less than the beginning balance.
Question 9:
If Ohio Company received $2,250 as partial payment on the $5,500 account of Carson Mueller
Co. and wrote off the remaining balance as uncollectible, the only difference between
recording the entry under the direct write-off method and the allowance method (assuming
that an adequate allowance account had been set up) would be
Answer:
a debit to Bad Debt Expense for $3,250 under the direct method rather than a debit to
Allowance for Doubtful Accounts for $3,250 under the allowance method.
Question 10:
If Modern Company received $3,650 from Connor Young Company on March 12 for the total
amount of an account that had been written off on March 1, the entry to reinstate the account
under the direct write-off method would include
Answer:
a credit to Bad Debt Expense of $3,650.
Question 11:
Under the direct write-off method,
Answer:
bad debt is recorded when specific customer accounts are determined to be uncollectible.
Question 1:
Notes and accounts receivable that result from sales transactions are sometimes called trade
receivables.
The category of "Other Receivables" does not include
Answer:
trade receivables.
Question 2:
The direct write-off method is required
Answer:
for federal income tax purposes.
Question 3:
Establishing an Allowance for Doubtful Accounts under the allowance method is necessary
because
Answer:
estimates must be made when recording bad debt expense and it is not possible to know which
specific accounts will not be collected.
Question 4:
Which of the following methods and bases of accounting for uncollectible accounts receivable is
inconsistent with the proper application of matching?
Answer:
Direct write-off method
Question 5:
A primary weakness of the direct write-off method is that
Answer:
the expense of a bad debt is not matched to the period that generated the uncollectible sale
amount.
, Question 6:
An account receivable that has been written off against the allowance account
Answer:
may be collected later.
may be reinstated by an entry that reverses the write-off. may be paid in cash and recorded as
a receipt on account.
*all the choices are correct*
Question 7:
The estimate of uncollectible accounts is based on all of the following except
Answer:
monthly cash expenses.
Question 8:
Allowance for Doubtful Accounts will have
Answer:
an unadjusted credit balance at the end of the period if the write-offs during the period were
less than the beginning balance.
Question 9:
If Ohio Company received $2,250 as partial payment on the $5,500 account of Carson Mueller
Co. and wrote off the remaining balance as uncollectible, the only difference between
recording the entry under the direct write-off method and the allowance method (assuming
that an adequate allowance account had been set up) would be
Answer:
a debit to Bad Debt Expense for $3,250 under the direct method rather than a debit to
Allowance for Doubtful Accounts for $3,250 under the allowance method.
Question 10:
If Modern Company received $3,650 from Connor Young Company on March 12 for the total
amount of an account that had been written off on March 1, the entry to reinstate the account
under the direct write-off method would include
Answer:
a credit to Bad Debt Expense of $3,650.
Question 11:
Under the direct write-off method,
Answer:
bad debt is recorded when specific customer accounts are determined to be uncollectible.
