Quiz on Chapter 7
Important: PRINT your responses in the space provided next to each question.
For the following Multiple Choice Questions, identify the letter of the choice (A,B,C, D or E) that best completes the statement
or answers the question.
____ 1. On December 16, 2004, Bank of Athens accepts a $10,000, 60 day, 7% note from a customer. If the
bank’s accounting period ends on December 31, 2004, and the note is collected on February 14, 2005,
which one of the following statements will be TRUE for Bank of Athens (round answers to the nearest
On December 31, 2004, the Bank will credit Interest Receivable for $29.
On February 14, 2005, the Bank will credit Interest Revenue for $117.
On February 14, 2005, the Bank will debit Interest Revenue for $88.
On February 14, 2005, the Bank will credit Interest Receivable for $29.
On December 16, 2004, the Bank will debit Interest Revenue for $29.
____ 2. On Jan 1, 2004, Allowance for Doubtful Accounts balance is $550. On December 31, 2004,
Allowance for Doubtful Accounts balance is $910. Bad debts expense for 2004 is $630 and $870 of
accounts are written off in 2004. What is the amount of cash collected on previously written off
____ 3. Ardy Company has the following unadjusted account balances on December 31, of the current
year. The preadjustment balance of Allowance for Doubtful Accounts is $1,600 debit. This company
uses the following aging of accounts receivable to estimate its bad debts.