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Quiz 4 Fall 2010 - The allowance balance on Jan 1 2009 was...

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ACC 311- Quiz 4 NAME__________________________________ ( 5 Points Each) 1. A firm sells merchandise with the terms 3/15, n/30 to Grand Company. How many days does Grand Co. have to pay in order to be able to take the discount offered? ___________ 15 2. Which of the following is NOT an accurate description of the allowance for doubtful accounts ? A. Contra-account B. Temporary account True or False 3. Bad Debt Expense is typically booked when a customer’s account (amount owed) is actually written off (determined that they will never pay). 4. On June 25 th , 2010 Rocky Corporation sells merchandise on account to the Sports Outlet Company for $100,000 with terms 4/10, n/30. On July 2 nd , 2010, payment is received from the Sports Outlet Company for the total and correct balance due for that day. What is the amount of cash received? __________________ 96000 5. Dallas Company uses the aging of accounts receivable method . They determined that the ending balance in their allowance for bad debt account on 12/31/2009 should be $25,000.
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Unformatted text preview: The allowance balance on Jan. 1, 2009 was $7,000 (credit). Dallas Company had specific A/R write-offs of $9,000 during 2009. Based only on these facts what is the amount of bad debt expense that should be recognized/booked in 2009? ______________________ 27,000 True or False 6. Booking/recording bad debt expense will reduce Net Income. 7. In 2007 Buffett Inc. had net credit sales of $1,000,000. On Jan. 1, 2007, their allowance for doubtful accounts had a credit balance of $50,000. During 2007, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that 2% of net credit sales become uncollectible. What is the ending allowance for doubtful account balance at Dec. 31, 200 7 ? Russell Co. uses the percentage of credit sales method to estimate bad debt expense. _________________ 40,000 8. Gross Profit = Net Revenue minus: A. Cost of Goods Sold (COGS) B. Credit Card Discounts C. Bad Debt Expense D. Sales Discounts E. B and D...
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