D102 Unit 6 & 7 Tests with accurate solutions ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
What is a sales discount? - correct answer✔✔An incentive for the buyer to pay more
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quickly
Which kind of account is Sales Returns and Allowances? - correct answer✔✔A contra-
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revenue account ||\\|//||
On January 16, a credit sale was made for $200. Terms for the sale were 3/15, n/30. Cash
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
for the sale was collected on January 25.
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Which debit or credit should be included in the journal entry to record the cash collection
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on January 25? - correct answer✔✔Debit Sales Discounts for $6
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On July 15, Quiet Flag Industries sold goods for $10,000 cash. Just three days later, the
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
customer returned the goods and was given a full cash refund. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit should be included in the journal entry on the books of the seller to
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record the return of the goods? - correct answer✔✔Credit Cash for $10,000
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On January 16, a credit sale was made for $300. Terms for the sale were 3/15, n/30. Cash
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
for the sale was collected on February 14.
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Which debit or credit should be included in the journal entry to record the cash collection
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
on February 14? - correct answer✔✔Credit Accounts Receivable for $300
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With respect to bad debts, what is the direct write-off method? - correct
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answer✔✔Recognizing bad debt expense after confirming that a specific customer is not ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
going to pay ||\\|//|| ||\\|//||
, How does a person compute the net balance in Accounts Receivable that is reported in the
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balance sheet? - correct answer✔✔Accounts Receivable − the Allowance for Bad Debts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Paradigm Toys estimated Bad Debt Expense for the year to be $10,000. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit is included in the adjusting entry to record Bad Debt Expense for the
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
year? - correct answer✔✔Debit Bad Debt Expense for $10,000
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Endothon Company estimated bad debt expense for the year to be $7,000. Total accounts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
written off as uncollectible during the year were $7,300. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit is included in the summary journal entry to record the write-off of
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
uncollectible accounts during the year? - correct answer✔✔Debit Allowance for Bad Debts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
for $7,300 ||\\|//||
Orange Zest Company estimated Bad Debt Expense using the percentage of accounts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
receivable method. Total sales for the year were $500,000. The ending balance in Accounts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Receivable was $100,000. An examination of the outstanding accounts at the end of the ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
year indicates that approximately 12% of these accounts will ultimately prove to be
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uncollectible. Before any adjustment, the balance in the Allowance for Bad Debts is $700 ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
(debit). Total accounts written off as uncollectible during the year were $14,700.
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Which debit or credit is included in the adjusting entry to record Bad Debt Expense for the
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year? - correct answer✔✔Debit Bad Debt Expense for $12,700
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Total recorded sales, before any subtractions for discounts, returns, or allowances, is
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labeled gross sales. ||\\|//|| ||\\|//||
What is the label given to the sales amount after subtractions for discounts, returns, and
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allowances? - correct answer✔✔Net sales ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Credit sales for the year were $100,000. Collections on account were $88,000.
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What is a sales discount? - correct answer✔✔An incentive for the buyer to pay more
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
quickly
Which kind of account is Sales Returns and Allowances? - correct answer✔✔A contra-
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revenue account ||\\|//||
On January 16, a credit sale was made for $200. Terms for the sale were 3/15, n/30. Cash
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
for the sale was collected on January 25.
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Which debit or credit should be included in the journal entry to record the cash collection
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
on January 25? - correct answer✔✔Debit Sales Discounts for $6
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On July 15, Quiet Flag Industries sold goods for $10,000 cash. Just three days later, the
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
customer returned the goods and was given a full cash refund. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit should be included in the journal entry on the books of the seller to
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
record the return of the goods? - correct answer✔✔Credit Cash for $10,000
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On January 16, a credit sale was made for $300. Terms for the sale were 3/15, n/30. Cash
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
for the sale was collected on February 14.
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Which debit or credit should be included in the journal entry to record the cash collection
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
on February 14? - correct answer✔✔Credit Accounts Receivable for $300
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
With respect to bad debts, what is the direct write-off method? - correct
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
answer✔✔Recognizing bad debt expense after confirming that a specific customer is not ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
going to pay ||\\|//|| ||\\|//||
, How does a person compute the net balance in Accounts Receivable that is reported in the
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
balance sheet? - correct answer✔✔Accounts Receivable − the Allowance for Bad Debts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Paradigm Toys estimated Bad Debt Expense for the year to be $10,000. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit is included in the adjusting entry to record Bad Debt Expense for the
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
year? - correct answer✔✔Debit Bad Debt Expense for $10,000
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Endothon Company estimated bad debt expense for the year to be $7,000. Total accounts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
written off as uncollectible during the year were $7,300. ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit is included in the summary journal entry to record the write-off of
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
uncollectible accounts during the year? - correct answer✔✔Debit Allowance for Bad Debts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
for $7,300 ||\\|//||
Orange Zest Company estimated Bad Debt Expense using the percentage of accounts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
receivable method. Total sales for the year were $500,000. The ending balance in Accounts ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Receivable was $100,000. An examination of the outstanding accounts at the end of the ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
year indicates that approximately 12% of these accounts will ultimately prove to be
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
uncollectible. Before any adjustment, the balance in the Allowance for Bad Debts is $700 ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
(debit). Total accounts written off as uncollectible during the year were $14,700.
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Which debit or credit is included in the adjusting entry to record Bad Debt Expense for the
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
year? - correct answer✔✔Debit Bad Debt Expense for $12,700
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Total recorded sales, before any subtractions for discounts, returns, or allowances, is
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
labeled gross sales. ||\\|//|| ||\\|//||
What is the label given to the sales amount after subtractions for discounts, returns, and
||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
allowances? - correct answer✔✔Net sales ||\\|//|| ||\\|//|| ||\\|//|| ||\\|//||
Credit sales for the year were $100,000. Collections on account were $88,000.
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