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Unformatted text preview: Version 3 Page 1 ACC201- Principles of Accounting I - Section B Quiz # 7 ( Chapter8) Name: ______________________________________________ November 2, 2010 1. Kinsler Company uses the percentage of receivables method for recording bad debts expense. The Accounts Receivable balance is $200,000 and credit sales are $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Kinsler Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? A) Bad Debts Expense 10,000 Allowance for Doubtful Accounts 10,000 B) Bad Debts Expense 12,000 Accounts Receivable 12,000 C) Bad Debts Expense 6,000 Allowance for Doubtful Accounts 6,000 D) Bad Debts Expense 8,000 Allowance for Doubtful Accounts 8,000 2. A company that uses the allowance method writes off a specific account as uncollectible, but then the customer pays. The entries made upon receiving payment will A) increase Allowance for Uncollectible Accounts. B) decrease Uncollectible Accounts Expense. C) decrease Accounts Receivable....
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This note was uploaded on 06/19/2011 for the course ACC 201 taught by Professor - during the Fall '10 term at Sam Houston State University.
- Fall '10