ACC 301 FINAL STUDY GUIDE
Schedule for analyzing the changes in allowance for doubtful accounts - Answers -
Beginning Balance+ Provision for doubtful accounts +Recovery (year) Debt Written off
previously = X -(bad debts + additional receivables) = Balance before changes in
accounting estimate
computation of allowance for doubtful accounts - Answers -
balance*percentage=doubtful Amt, add all doubtful amt
X, X-Balance=increase due to change in acc estimate.(Y)
**Prior to-write off
Record Year End Adjustment - Answers -Bad debt expense (Y)
allow for doubtful acct (Y)
appropriate balance for Allowance for Doubtful Accounts at year-end - Answers -
Amount*(1-Probability for collection)=estimated uncollectible, find total
Accounts Recievable (AR-Over75 days write off)
Less: allowance for doubtful acct
Net Accounts Recievable
What is the dollar effect of the year-end bad debt adjustment on the before-tax income -
Answers -Estimated uncollectible in Allowance for doubtful accounts:
Less: Balance (Allowance for Doubtful Accounts creditbal -75 day outstanding amount)
Bad debt adj on before tax income
Prepare the entry for estimated bad debts assuming that doubtful accounts are
estimated... - Answers -Bad Debts expense X(A/R*of gross accounts receivable)-
Allowance for doubtful acct)
Allowance for Doubtful Accounts X
*if debit instead of credit, + instead of - allowance for db acct
Prepare a bank reconciliation - Answers -Balance per bank
Add: Deposits in transit
Less: Outstanding checks
Correct cash balance=Z
Balance per books
Add: Error in recording deposit (x-y)
Error on check (#-entry)
Note collection (bank memo note+interest)
Less: NSF check (bank charge uncollectible)
Error on check no. (#-entry)
, Bank service charges (#+charge on collection)
Correct cash balance=Z
Cash
Accounts Receivable (error in recording deposit)
Accounts Payable (error on check that is overstated)
Notes Receivable (original bank memo note)
Interest Revenue (error on check understated)
Accounts Receivable (NSF Check)
Accounts Payable (Same as int revenue)
Office Expense—Bank Charges (bank serv charges)
Cash
Prepare journal entries, Accounts receivable w/ security for a loan&commission -
Answers -Cash
Interest Expense (AR*%commission)
Notes Payable (Security commission)
Cash (collected)
Sales Discount
Allowance for Doubtful accounts (write off)
Accounts Receivable
Notes Payable (collected on assigned account)
Interest Expense (security*IR on note%*1/12)
Cash
Prepare the journal entry with finance charge to cover sales discounts - Answers -
Swiftly:
Cash
Due from factor (A/R*finance charge %)
Loss on sale of receivable (A/R*% of total receivables)
Accounts receivable (factored)
Quickbook Entries: (same #s)
Accounts Receivable
Due to Customer
Interest Revenue (loss on sale)
Cash
deposits all receipts and makes all payments by check w/ cash records bank & books -
Answers -Deposits in transit:
Month deposits per book-(month deposits per bank-deposits in transit)=Ans.
Schedule for analyzing the changes in allowance for doubtful accounts - Answers -
Beginning Balance+ Provision for doubtful accounts +Recovery (year) Debt Written off
previously = X -(bad debts + additional receivables) = Balance before changes in
accounting estimate
computation of allowance for doubtful accounts - Answers -
balance*percentage=doubtful Amt, add all doubtful amt
X, X-Balance=increase due to change in acc estimate.(Y)
**Prior to-write off
Record Year End Adjustment - Answers -Bad debt expense (Y)
allow for doubtful acct (Y)
appropriate balance for Allowance for Doubtful Accounts at year-end - Answers -
Amount*(1-Probability for collection)=estimated uncollectible, find total
Accounts Recievable (AR-Over75 days write off)
Less: allowance for doubtful acct
Net Accounts Recievable
What is the dollar effect of the year-end bad debt adjustment on the before-tax income -
Answers -Estimated uncollectible in Allowance for doubtful accounts:
Less: Balance (Allowance for Doubtful Accounts creditbal -75 day outstanding amount)
Bad debt adj on before tax income
Prepare the entry for estimated bad debts assuming that doubtful accounts are
estimated... - Answers -Bad Debts expense X(A/R*of gross accounts receivable)-
Allowance for doubtful acct)
Allowance for Doubtful Accounts X
*if debit instead of credit, + instead of - allowance for db acct
Prepare a bank reconciliation - Answers -Balance per bank
Add: Deposits in transit
Less: Outstanding checks
Correct cash balance=Z
Balance per books
Add: Error in recording deposit (x-y)
Error on check (#-entry)
Note collection (bank memo note+interest)
Less: NSF check (bank charge uncollectible)
Error on check no. (#-entry)
, Bank service charges (#+charge on collection)
Correct cash balance=Z
Cash
Accounts Receivable (error in recording deposit)
Accounts Payable (error on check that is overstated)
Notes Receivable (original bank memo note)
Interest Revenue (error on check understated)
Accounts Receivable (NSF Check)
Accounts Payable (Same as int revenue)
Office Expense—Bank Charges (bank serv charges)
Cash
Prepare journal entries, Accounts receivable w/ security for a loan&commission -
Answers -Cash
Interest Expense (AR*%commission)
Notes Payable (Security commission)
Cash (collected)
Sales Discount
Allowance for Doubtful accounts (write off)
Accounts Receivable
Notes Payable (collected on assigned account)
Interest Expense (security*IR on note%*1/12)
Cash
Prepare the journal entry with finance charge to cover sales discounts - Answers -
Swiftly:
Cash
Due from factor (A/R*finance charge %)
Loss on sale of receivable (A/R*% of total receivables)
Accounts receivable (factored)
Quickbook Entries: (same #s)
Accounts Receivable
Due to Customer
Interest Revenue (loss on sale)
Cash
deposits all receipts and makes all payments by check w/ cash records bank & books -
Answers -Deposits in transit:
Month deposits per book-(month deposits per bank-deposits in transit)=Ans.
