Chapeter 8.docx - When an account is written off using the...

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When an account is written off using the allowance method, accounts receivable decreases and the allowance account decreases . decreases and the allowance account increases. is unchanged and the allowance account increases. increases and the allowance account increases. Which of the following methods is not acceptable for financial reporting purposes? Percentage of sales (emphasis on income statement). Percentage of receivables (emphasis on statement of financial position). Direct write-off. All of these answer choices are acceptable.
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Rodgers Company lends Lanier Company $80,000 on April 1, accepting a four-month, 9% interest note. Rodgers Company prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared? Interest Receivable 2,400 Interest Revenue 2,400 Note Receivable 80,000 Cash 80,000 Interest Receivable 600 Interest Revenue 600 Cash 600 Interest Revenue 600 Miles to Go is a travel agency specializing in tours to Africa and Australia. Miles to Go has $2,000,000 in accounts receivable and factors these receivables with Fox Factors. The agreement with Fox calls for a service charge of 2% of the amount of receivables sold. The net effects on the statement of financial position for Miles to Go of factoring its receivables is a(n) Increase in equity of $1,960,000. Decrease in equity of $40,000. Increase in assets of $40,000. Increase in assets of $1,960,000.
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Miles to Go is a travel agency specializing in tours to Africa and Australia. Miles to Go has $4,000,000 in accounts receivable. During 2017, Miles to Go enters into a factoring arrangement with Fox Factors to factor 75% of their receivables. The agreement with Fox calls for a services charge of 2% of the amount of receivables sold. The effects on the statement of financial position for Miles to Go of factoring its receivables includes a(n) Increase in cash of $2,940,000. Increase in assets of $4,000,000. Increase in cash of $3,920,000. Increase in equity of $80,000. Trade accounts receivable are valued and reported on the statement of financial position in the investment section. at gross amounts less sales returns and allowances.
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  • Spring '17
  • Balance Sheet, Generally Accepted Accounting Principles, Doubtful Accounts

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