Direct Write-off
How many legs does a lobster have?
10 legs
True or False: The allowance method is approved by GAAP because it follows the revenue recognition principle.
False: Matching Principle
What do we call the Accounts Receivable account that includes all transactions from subsidiary accounts?
Control Account
What do we debit when we want to turn an A/R into a N/R?
Notes Receivable
My Days in sales A/R is 32 days. When compared to a 30 day collection period, how would you explain this performance?
A little worse than the company's 30 day credit period
What do we call individualized accounts of Accounts Receivable that are separated by client?
Subsidiary accounts
Which account is used in this method that is NOT used in the Direct Write Off method?
What is the equation to calculate Net Realizable Value?
Accounts Receivable - Allowance for Bad Debts
Suppose we had a six-month, 10% note receivable for $1,500 from a customer that was signed on March 3, 2025, and they default. We will record the default on September 3, 2025, as follows:
A/R 1575
N/R 1500
Interest Revenue 75
(1,500*.10*6/12)
What US state ends in three consecutive vowels?
Hawaii
On August 10, Amazon determines that it will not be able to collect $2000 from a customer for a sale of merchandise inventory made on May 1. Write the JE
Bad Debt Expense $2000
Accounts Receivable $2000
How many elements are on the periodic table?
118
What is the JR to write off $55,000 of accounts receivable?
Allowance for Bad Debt 55,000
Accounts Receivable 55,000
If I accept a 158 day note on May 16th, when is the maturity date?
October 21st
Find the Acid Test (Quick Ratio):
Cash: $40,000
Current Liabilities: $77,000
Cash Equivs: $15,000
Inventory: $45,000
A/R (net): $17,000
.935
93 cents of quick assets for every $1.00 in CL
Record the Entry to reinstate a previously written off account of $56,000
Accounts Receivable $56,000
Bad Debt Expense $56,000
0-60 receivables 3% uncollectable: $45,000
60-90 receivables 12% uncollectable: $51,000
90+ receivables 28% uncollectable: $17,000
Record the entry to record the estimate of bad debt expense if Allowance for Bad Debt has a credit balance of $2800
Bad Debt Expense $9430
Allowance for Bad Debt $9430
What is the JE to record bad debts expense for the period of $53,000
Bad Debt Expense 53,000
Allowance for Bad Debt 53,000
What is the only US state that only borders one other state?
Maine
Find the A/R turnover ratio for 2022:
Net sales 2022: $140,000
Net sales 2021: $130,000
A/R net 2022: $44,000
A/R net 2021: $22,000
4.24 times
On April 30th, our receivables totaled $18,000. During May, we earned revenue on account of $23,000 and collected $15,000 of that. We had to write-off 1,100 for bad debt. What is our ending A/R balance?
$18,000 + $23,000 - $15,000 - $1,100
$24,900
On December 31, we had an unadjusted Accounts Receivable balance is $10,300, and 6% of accounts receivable is estimated to be uncollectible. The Allowance for Bad Debts account has a debit balance of $450. Record the adjusting entry on December 31 to recognize bad debts expense for the year.
Bad Debt Expense 1068
Allowance for Bad Debt 1068
What is the only food that does not expire?
Honey
On May 1, 2023, we loaned $70,000 to a customer on a one year, 17% note. Journalize the collection of the note at maturity.
Cash $81,900
Note Receivable $70,000
Interest Receivable $7,933.33
Interest Revenue $3,966.67
Find days in sales receivables using the following info:
Net credit sales $302,000
A/R 2022: $25,000
A/R 2023: $11,000
Cash Equivalents: $30,000
Cash: $42,000
365 / 16.78 = 21.75 days