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ACCT 101 EXAM 2023/2024 VERIFIED QUESTIONS AND ANSWERS GRADED A+(SOLVED)
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ACCT 101 EXAM 2023/2024 VERIFIED QUESTIONS AND ANSWERS GRADED A+(SOLVED)
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ACCT 101 EXAM 2023/2024ACCT 101 EXAM 2023/2024 VERIFIED
QUESTIONS AND ANSWERS GRADED
A+(SOLVED)
Which of the following does not correctly describe the following journal entry?
Cash Debit
credit card discount Debit
Accounts receivable Credit
A) Gross profit decreases.
B) Net income is not affected.
C) Net sales decreases.
D) Current assets decrease.
B) The debit to the credit card discount account is a contra-revenue account, which reduces both gross
profit and net income
Which of the following statements does not correctly describe the allowance for doubtful accounts
balance?
A) It is reported on the balance sheet as a component of stockholders' equity.
B) It is a contra-asset account
C) It is reported on the balance sheet as a component of current assets.
D) It is created as a result of the adjusting entry to record bad debt expense.
A)
Allowance for doubtful accounts is a contra-asset account and does not affect stockholders 'equity.
,ACCT 101 EXAM 2023/2024
Which of the following journal entries correctly records the write-off of an uncollectible account
receivable when using the allowance method?
A) Bad debt expense Debit
Uncollectable sale Credit
B) Bad debt expense Debit
Allowance for doubtful accounts Credit
C) Allowance for doubtful accounts Debit
Bad debt expense Credit
D) Allowance for doubtful accounts Debit
accounts receivable Credit
D)
The journal entry to write off an account receivable requires a debit to allowance for doubtful accounts
and a credit to accounts receivable.
The CHS Company has provided the following information:
Accounts receivable written off as uncollectible during the year amounted to $11,500
. The accounts receivable balance at the beginning of the year was $150,000.
The accounts receivable balance at the end of the year was $210,000.
The allowance for doubtful accounts balance at the beginning of the year was $14,000
, ACCT 101 EXAM 2023/2024
The allowance for doubtful accounts balance at the end of the year after the recording of bad debt
expense was $12,900.
Credit sales during the year totaled $900,000.
How much was CHS Company's bad debt expense?
A) $11,500.
B) $10,400.
C) $14,000
D) $12,900
B) Ending allowance for doubtful accounts, $12,900 = Beginning allowance for doubtful accounts,
$14,000 − Accounts receivable write-offs, $11,500 + Bad debt expense, $10,400.
What would be incorrect about reporting accounts receivable in the balance sheet?
A) Presenting accounts receivable at estimated net realizable value.
B) Presenting accounts receivable at gross amount, less allowance for doubtful accounts.
C) Presenting accounts receivable net of allowance for doubtful accounts.
D) Presenting accounts receivable less bad debt expense and write-offs.
D)
Bad debts and write-offs, if material, are reported on a schedule included in Form 10-K for public
companies but not on the balance sheet.
Under the allowance method, the financial statement impact of recording bad debt expense:
A) occurs when the net realizable value of accounts receivable is calculated.
B) occurs when the journal entry to write off accounts is recorded.
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