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MGMT 200 Exam 2 Questions with Detailed Verified
Answers
Accounts receivable are best described as
a. Liabilities of the company that represent the amount owed to suppliers
b. Amounts that have previously been received from customers
c. Assets of the company representing the amount owed by customers
d. Amounts that have been previously been paid to suppliers Ans: ✓ ✓ ✓ c. Assets of the company
representing the amount owed by customers
2. On March 17, Fox lumber sells materials to Whitney Construction for $12,000, terms 2/10, n/30.
Whitney pays for the materials on March 23. What amount would Fox record as revenue on March
17?
a. $12,400
b. $11,760
c. $12,000
d. $12,240 Ans: ✓ ✓ ✓ c. $12,000
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A sale of $12,000 with terms 2/10, n/30. What is the amount of net revenues (sales - sales
discounts) as of March 23?
a. $0
b. $11,760
c. $12,000
d. $12,240 Ans: ✓ ✓ ✓ b. $11,760
Allowance Method for Uncollectible Accounts
a. Is required by GAAP
b. Allows for the possibility that some accounts will not be collected
c. Reports net accounts receivable for the amount of cash expected to be collected.
d. All of the above Ans: ✓ ✓ ✓ d. All of the above
At the end of its first year of operations, a company estimates future uncollectible accounts to be
$4,500. The company's year-end adjusting entry would include:
a. A credit to Accounts Receivable
b. A credit to Allowance for Uncollectible Accounts for $4,500
c. A debit to Allowance for Uncollectible Accounts for $4,500
d. No adjusting entry is necessary because the accounts are not yet actual bad debts Ans: ✓ ✓ ✓
b. A credit to Allowance for Uncollectible Accounts for $4,500
Using the Allowance Method, the entry to record a write-off of accounts receivable will include:
a. A debit to Bad Debt Expense
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b. A debit to Allowance for Uncollectible Accounts
c. No entry because for uncollectible accounts was established in an earlier period
d. A debit account to Service Revenue Ans: ✓ ✓ ✓ b. A debit to Allowance for Uncollectible
Accounts
Using the allowance method, the effect on the current year's financial statements of writing off an
account receivable generally is to
a. Decrease total assets
b. Decrease net income
c. Both a. and b.
d. Neither a. nor b. Ans: ✓ ✓ ✓ d. Neither a. nor b.
A company has the following account balances at the end of the year:
- Credit Sales = $400,000
- Accounts Receivable = $80,000
- Allowance for Uncollectible Accounts = $400 credit
The company estimated future uncollectible accounts to be 4% of accounts receivable. At what
amount would Bad Debt Expense be reported in the current year's income statement?
a. $400
b. $2,800
c. $3,200
d. $3,600 Ans: ✓ ✓ ✓ b. $2,800
A company has the following account balances at the end of the year:
- Credit sales = $400,000
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MGMT 200 Exam 2 Questions with Detailed Verified
Answers
Accounts receivable are best described as
a. Liabilities of the company that represent the amount owed to suppliers
b. Amounts that have previously been received from customers
c. Assets of the company representing the amount owed by customers
d. Amounts that have been previously been paid to suppliers Ans: ✓ ✓ ✓ c. Assets of the company
representing the amount owed by customers
2. On March 17, Fox lumber sells materials to Whitney Construction for $12,000, terms 2/10, n/30.
Whitney pays for the materials on March 23. What amount would Fox record as revenue on March
17?
a. $12,400
b. $11,760
c. $12,000
d. $12,240 Ans: ✓ ✓ ✓ c. $12,000
© Get it right 2025 Getaway - Stuvia US All rights reserved
,Click here for more: Scholars nexus
A sale of $12,000 with terms 2/10, n/30. What is the amount of net revenues (sales - sales
discounts) as of March 23?
a. $0
b. $11,760
c. $12,000
d. $12,240 Ans: ✓ ✓ ✓ b. $11,760
Allowance Method for Uncollectible Accounts
a. Is required by GAAP
b. Allows for the possibility that some accounts will not be collected
c. Reports net accounts receivable for the amount of cash expected to be collected.
d. All of the above Ans: ✓ ✓ ✓ d. All of the above
At the end of its first year of operations, a company estimates future uncollectible accounts to be
$4,500. The company's year-end adjusting entry would include:
a. A credit to Accounts Receivable
b. A credit to Allowance for Uncollectible Accounts for $4,500
c. A debit to Allowance for Uncollectible Accounts for $4,500
d. No adjusting entry is necessary because the accounts are not yet actual bad debts Ans: ✓ ✓ ✓
b. A credit to Allowance for Uncollectible Accounts for $4,500
Using the Allowance Method, the entry to record a write-off of accounts receivable will include:
a. A debit to Bad Debt Expense
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b. A debit to Allowance for Uncollectible Accounts
c. No entry because for uncollectible accounts was established in an earlier period
d. A debit account to Service Revenue Ans: ✓ ✓ ✓ b. A debit to Allowance for Uncollectible
Accounts
Using the allowance method, the effect on the current year's financial statements of writing off an
account receivable generally is to
a. Decrease total assets
b. Decrease net income
c. Both a. and b.
d. Neither a. nor b. Ans: ✓ ✓ ✓ d. Neither a. nor b.
A company has the following account balances at the end of the year:
- Credit Sales = $400,000
- Accounts Receivable = $80,000
- Allowance for Uncollectible Accounts = $400 credit
The company estimated future uncollectible accounts to be 4% of accounts receivable. At what
amount would Bad Debt Expense be reported in the current year's income statement?
a. $400
b. $2,800
c. $3,200
d. $3,600 Ans: ✓ ✓ ✓ b. $2,800
A company has the following account balances at the end of the year:
- Credit sales = $400,000
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