Chapter 7 - Chapter 7 Question 1 1 out of 1 points If a...

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Chapter 7 Question 1 1 out of 1 points If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as Selected Answer: a deduction from sales in the income statement. Answers: a deduction from sales in the income statement. an item of "other expense" in the income statement. a deduction from accounts receivable in determining the net realizable value of accounts receivable. sales discounts forfeited in the cost of goods sold section of the income statement. Question 2 1 out of 1 points Assuming that the ideal measure of short-term receivables in the balance sheet is the discounted value of the cash to be received in the future, failure to follow this practice usually does not make the balance sheet misleading because Selected Answer: the amount of the discount is not material. Answers: most short-term receivables are not interest-bearing. the allowance for uncollectible accounts includes a discount element. the amount of the discount is not material. most receivables can be sold to a bank or factor. Question 3 1 out of 1 points Which of the following methods of determining bad debt expense does not properly match expense and revenue? Selected Answer: Charging bad debts as accounts are written off as uncollectible. Answers: Charging bad debts with a percentage of sales under the allowance method. Charging bad debts with an amount derived from a percentage
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of accounts receivable under the allowance method. Charging bad debts with an amount derived from aging accounts receivable under the allowance method. Charging bad debts as accounts are written off as uncollectible. Question 4 1 out of 1 points Holtzman Corporation had a 1/1/07 balance in the Allowance for Doubtful Accounts of $10,000. During 2007, it wrote off $7,200 of accounts and collected $2,100 on accounts previously written off. The balance in Accounts Receivable was $200,000 at 1/1 and $240,000 at 12/31. At 12/31/07, Holtzman estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2007? Selected Answer: $7,10 0. Answers: $2,000. $7,1 00. $9,200. $12,00 0. Question 5 0 out of 1 points King Co.'s allowance for uncollectible accounts was $95,000 at the end of 2007 and $90,000 at the end of 2006. For the year ended December 31, 2007, King reported bad debt expense of $13,000 in its income statement. During the year, King had to write off receivables. How much receivables were written off in 2007? Selected Answer: $5,0 00 Answers: $5,000 $8,0 00 $13,00 0 $18,00 0 Question 6 1 out of 1 points
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May Co. prepared an aging of its accounts receivable at December 31, 2007 and determined that the net realizable value of the receivables was $300,000. Additional information is available as follows: Allowance for uncollectible accounts at 1/1/07—credit balance: $34,000 Accounts written off as uncollectible during 2007: 23,000
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