ACCT 201A EXAM 2 HOFFMAN
When a company provides services on account, which of the following accounts is debited?
Service Revenue.
Accounts Payable.
Accounts Receivable.
Cash. - CORRECT ANSWER -Accounts Receivable.
A sales discount is recorded by the seller as a(n):
Expense.
Contra asset.
Contra revenue.
Liability. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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.
When a company provides services on account, which of the following accounts is debited?
Service Revenue.
Accounts Payable.
Accounts Receivable.
Cash. - CORRECT ANSWER -Accounts Receivable.
A sales discount is recorded by the seller as a(n):
Expense.
Contra asset.
Contra revenue.
Liability. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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. - CORRECT 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.
