Accounts Receivables Paper 2

1

Under the allowance method of recognizing uncollectible accounts, the entry to write-off an uncollectible account






2

The following accounts were abstracted from Roxy Co.’s unadjusted trial balance at December 31:
.......................................Debit ..............Credit
Accounts receivable ..........$1,000,000
Allowance for uncollectible
accounts............................ 8,000
Net credit sales ................................$3,000,000
Roxy estimates that 3% of the gross accounts receivable will become uncollectible. After adjustment at December 31, the allowance for uncollectible accounts should have a credit balance of






3

A change in credit policy has caused an increase in sales, an increase in discounts taken, a reduction in the investment in accounts receivable, and a reduction in the number of doubtful accounts. Based upon this information, we know that






4

A change in credit policy has caused an increase in sales, an increase in discounts taken, a decrease in the amount of bad debts, and a decrease in the investment in accounts receivable. Based upon this information, the company’s






5

The average collection period for a firm measures the number of days






6

Which of the following represents a firm’s average gross receivables balance?
I. Days’ sales in receivables × accounts receivable turnover.
II. Average daily sales × average collection period.
III. Net sales ÷ average gross receivables.






7

An aging of accounts receivable measures the






8

When a company analyzes credit applicants and increases the quality of the accounts rejected, the company is attempting to






9

An increase in sales resulting from an increased cash discount for prompt payment would be expected to cause






10

An organization would usually offer credit terms of 2/10, net 30 when






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