ACCT 201A Exam 2 Hoffman Study
Guide Questions With 100% Correct
Answers 2026-2027 Update.
When a company provides services on account, which of the following accounts is debited?
Service Revenue.
Accounts Payable.
Accounts Receivable.
Cash. - Answer Accounts Receivable.
A sales discount is recorded by the seller as a(n):
Expense.
Contra asset.
Contra revenue.
Liability. - Answer contra
On January 18, a company provides services to a customer for $500 and offers the customer
terms 2/10, n/30. Which of the following would be recorded when the customer remits
payment on January 25?
Debit Cash for $500.
Credit Accounts Receivable for $490.
Credit Service Revenue for $500.
Debit Sales Discount for $10. - Answer Debit Sales Discount for $10.
Which of the following refers to the seller reducing the customer's balance owed because of
some deficiency in the company's product or service?
Sales Allowance.
Sales Discount.
Trade Discount.
Allowance for Uncollectible Accounts. - Answer Sales Allowance.
Use the information below to calculate net revenues.
Service Revenue$100,000 Sales Discounts$2,000 Accounts Receivable$15,000 Sales
Allowances$7,000 Cash$18,000
$91,000.
$85,000.
,$68,000.
$98,000. - Answer $91,000. (Don't include cash or account receivable both assets)
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30.
Frederickson pays for the services on August 12. What amount would Sanders record as
revenue on August 4?
$4,850.
$5,000.
$5,150.
$5,300. - Answer $5,000.
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30.
Frederickson pays for the services on August 12. What is the amount of net revenues (total
revenue minus sales discounts) as of August 12?
$4,850.
$5,000.
$5,150.
$5,300. - Answer $4,850.
The entry to record the estimate for uncollectible accounts includes:
A debit to Allowance for Uncollectible Accounts.
A credit to Accounts Receivable.
A debit to Sales Revenue.
A debit to Bad Debt Expense. - Answer A debit to Bad Debt Expense.
Under the allowance method for uncollectible accounts, the balance of Allowance for
Uncollectible Accounts increases when:
Future bad debts are estimated.
Bad debts actually occur.
Cash is received from customers.
Never. - Answer Future bad debts are estimated.
Schmidt Company's Accounts Receivable balance is $100,000, its adjusted balance in Allowance
for Uncollectible Accounts is $4,000, and its bad debt expense is $3,800. The net amount of
accounts receivable is:
$96,000.
$96,200.
, $100,000.
$104,000. - Answer $96,000.
At the end of its first year of operations, a company establishes an allowance for future
uncollectible accounts for $5,600. At what amount would bad debt expense be reported in the
current year's income statement?
$800.
$4,800.
$5,600.
$6,400. - Answer $5,600.
If a company uses the allowance method of accounting for uncollectible accounts and writes off
a specific account:
Net accounts receivable increase.
Net accounts receivable decrease.
Net accounts receivable do not change.
The effect on net account receivables depends on the relationship between the allowance
account balance and the amount of the write off. - Answer Net accounts receivable do not
change.
If a company uses the allowance method of accounting for uncollectible accounts and collects
cash on an account receivable previously written off:
Total assets increase.
Total assets decrease.
There is no change in total assets.
The change in total assets depends on the relationship between the allowance account balance
and the amount of the collection. - Answer There is no change in total assets.
The effect of writing off a specific account receivable is:
A reduction in the Allowance for Uncollectible Accounts.
An increase in the amount of Accounts Receivable.
An increase in the amount of Bad Debt Expense.
An increase in the Allowance for Uncollectible Accounts. - Answer A reduction in the
Allowance for Uncollectible Accounts.
On December 31, the Accounts Receivable ending balance is $80,000. Assume that the
unadjusted balance of Allowance for Uncollectible Accounts is a debit of $500 and that the
Guide Questions With 100% Correct
Answers 2026-2027 Update.
When a company provides services on account, which of the following accounts is debited?
Service Revenue.
Accounts Payable.
Accounts Receivable.
Cash. - Answer Accounts Receivable.
A sales discount is recorded by the seller as a(n):
Expense.
Contra asset.
Contra revenue.
Liability. - Answer contra
On January 18, a company provides services to a customer for $500 and offers the customer
terms 2/10, n/30. Which of the following would be recorded when the customer remits
payment on January 25?
Debit Cash for $500.
Credit Accounts Receivable for $490.
Credit Service Revenue for $500.
Debit Sales Discount for $10. - Answer Debit Sales Discount for $10.
Which of the following refers to the seller reducing the customer's balance owed because of
some deficiency in the company's product or service?
Sales Allowance.
Sales Discount.
Trade Discount.
Allowance for Uncollectible Accounts. - Answer Sales Allowance.
Use the information below to calculate net revenues.
Service Revenue$100,000 Sales Discounts$2,000 Accounts Receivable$15,000 Sales
Allowances$7,000 Cash$18,000
$91,000.
$85,000.
,$68,000.
$98,000. - Answer $91,000. (Don't include cash or account receivable both assets)
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30.
Frederickson pays for the services on August 12. What amount would Sanders record as
revenue on August 4?
$4,850.
$5,000.
$5,150.
$5,300. - Answer $5,000.
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30.
Frederickson pays for the services on August 12. What is the amount of net revenues (total
revenue minus sales discounts) as of August 12?
$4,850.
$5,000.
$5,150.
$5,300. - Answer $4,850.
The entry to record the estimate for uncollectible accounts includes:
A debit to Allowance for Uncollectible Accounts.
A credit to Accounts Receivable.
A debit to Sales Revenue.
A debit to Bad Debt Expense. - Answer A debit to Bad Debt Expense.
Under the allowance method for uncollectible accounts, the balance of Allowance for
Uncollectible Accounts increases when:
Future bad debts are estimated.
Bad debts actually occur.
Cash is received from customers.
Never. - Answer Future bad debts are estimated.
Schmidt Company's Accounts Receivable balance is $100,000, its adjusted balance in Allowance
for Uncollectible Accounts is $4,000, and its bad debt expense is $3,800. The net amount of
accounts receivable is:
$96,000.
$96,200.
, $100,000.
$104,000. - Answer $96,000.
At the end of its first year of operations, a company establishes an allowance for future
uncollectible accounts for $5,600. At what amount would bad debt expense be reported in the
current year's income statement?
$800.
$4,800.
$5,600.
$6,400. - Answer $5,600.
If a company uses the allowance method of accounting for uncollectible accounts and writes off
a specific account:
Net accounts receivable increase.
Net accounts receivable decrease.
Net accounts receivable do not change.
The effect on net account receivables depends on the relationship between the allowance
account balance and the amount of the write off. - Answer Net accounts receivable do not
change.
If a company uses the allowance method of accounting for uncollectible accounts and collects
cash on an account receivable previously written off:
Total assets increase.
Total assets decrease.
There is no change in total assets.
The change in total assets depends on the relationship between the allowance account balance
and the amount of the collection. - Answer There is no change in total assets.
The effect of writing off a specific account receivable is:
A reduction in the Allowance for Uncollectible Accounts.
An increase in the amount of Accounts Receivable.
An increase in the amount of Bad Debt Expense.
An increase in the Allowance for Uncollectible Accounts. - Answer A reduction in the
Allowance for Uncollectible Accounts.
On December 31, the Accounts Receivable ending balance is $80,000. Assume that the
unadjusted balance of Allowance for Uncollectible Accounts is a debit of $500 and that the
