Chapter 8
Which method for valuing receivables is not allowed under GAAP (Generally accepted accounting principles)?
Direct Write Off
Historical cost principle
What is the journal entry to record an uncollectible using the direct write off method?
debit to bad debt expense and credit to accounts receivable
Name 3 costs that are typically included in determining the overall price of land?
Attorney's fees, price of property, real estate broker's commission fees
Accounts Receivable-Allowance for Doubtful Accounts
True or false: Depreciation methods are not allowed to be changed from time to time
FALSE
What is the journal entry to record an uncollectible under the allowance method?
Debit to bad debt expense and credit to allowance for doubtful accounts
Which depreciation method does not consider the salvage value in determining depreciation expense?
Declining balance method
What is the formula for account receivable turnover and what does it measure?
A/R turnover= Net credit Sales/Average net A/R
Measures how quickly A/R can be collected and essentially converted to cash
Name the 5 types of intangible assets covered in chapter 9?
1. Franchises
2. Trademarks
3. Copyrights
4. Patents
5. Goodwill