Accounting Exam 2 Questions With Correct Answers

Accounting Exam 2: Questions With
Correct Answers 2025/2026

Measurement f(during fthe fyear): fDuringAthe fyear, fa fcompany fprovides fservices fto fcustomers fon
faccount fand fexpects fto freceive fcash fin fthe ffuture. fThe fcompany frecords fthese fservices fon
faccount fto fwhich fof ft fhe ffollowing faccounts?


a. Cash.

b. Accounts fReceivable.

c. Allowance ffor fUncollectible fAccounts.

d. Services fon faccount fare fnot frecorded funtil fthe fcash fis fcollected. f- fCORRECT fANSWER f-b




Measurement f(end fof fthe fyear): fAt fthe fend fof fthe fyear, fan fadjusting fentry fis frecorded fto
festimate ffutur fe funcollectible faccounts. fThe fadjusting fentry finvolves:


a. Debit fBad fDebt fExpense; fcredit fAllowance ffor fUncollectible fAccounts.

b. Debit fBad fDebt fExpense; fcredit fAccounts fReceivable.

c. Debit fService fRevenue; fcredit fAccounts fReceivable.

d. Debit fAllowance ffor fUncollectible fAccounts; fcredit fAccounts fReceivable. f- fCORRECT fANSWER f-a

,Communication f(income fstatement): fThe fbalance fof fBad fDebt fExpense ffrom festimating ffuture
funcollect fible faccounts fhas fwhat feffect fon fthe fincome fstatement fin fthe fcurrent fyear?


A. Increases fnet fincome.

B. Decreases fnet fincome.

C. No feffect. f- fCORRECT fANSWER f-b




Communication f(balance fsheet): fWhich fof fthe ffollowing fis freported fin fthe fbalance fsheet fas fa
fcontra f(or fnegative) fasset faccount fequal fto fthe famount fof festimated ffuture funcollectible
faccounts?


A. Bad fDebt fExpense.

B. Accounts fReceivable.

C. Allowance ffor fUncollectible fAccounts.

D. Service fRevenue. f- fCORRECT fANSWER f-c

,Decision fMaking f(ratio fanalysis): fA fcompany fthat fprovides fcredit fsales for fservices fto fcustomers
fand fthe fn fmore feffectively fcollects fcash ffrom fthose fcredit fcustomers fwould freport fa freceivables
fturnover fratio.


A. Higher.

B. Lower. f- fCORRECT fANSWER f-a




Accounts freceivable: f- fCORRECT fANSWER f-

The famounts fowed fto fthe fcompany fby fits fcustomers ffrom fthe fsale fof fgoods for fservices fon
faccount.




Aging fmethod: f- fCORRECT fANSWER f-

Basing fthe festimate fof ffuture fbad fdebts fon fthe fvarious fages fof findividual faccounts freceivable,
fusing fa fhi fgher fpercentage ffor f"old" faccounts fthan ffor f"new" faccounts.




Allowance ffor funcollectible faccounts: f- fCORRECT fANSWER f-

Contra fasset faccount frepresenting fthe famount fof faccounts freceivable fnot fexpected fto fbe fcollected.




Allowance fmethod: f- fCORRECT fANSWER f-

Method fof freporting faccounts freceivable ffor fthe fnet famount fexpected fto fbe fcollected.




Average fcollection fperiod: f- fCORRECT fANSWER f-

Approximate fnumber fof fdays fthe faverage faccounts freceivable fbalance fis foutstanding. fIt fequals

, f365 fdivi fded fby fthe freceivables fturnover fratio.




Bad fdebt fexpense: f- fCORRECT fANSWER f-

The fcost fof festimated ffuture fbad fdebts fthat fis freported fas fan fexpense fin fthe fcurrent fyear's fincome
fstat fement.




Contra frevenue faccount: f- fCORRECT fANSWER f-

An faccount fwith fa fbalance fthat fis fopposite, for f"contra," fto fthat fof fits frelated frevenue faccount.




Credit fsales: f- fCORRECT fANSWER f-

Transfer fof fgoods for fservices fto fa fcustomer ftoday fwhile fbearing fthe frisk fof fcollecting fpayment ffrom
fthat fcustomer fin fthe ffuture. fAlso fknown fas fsales fon faccount for fservices fon faccount