Financial Accounting

Topics: Accounts receivable, Balance sheet, Generally Accepted Accounting Principles Pages: 11 (2091 words) Published: March 6, 2013
|1. |Notes Receivable and Accounts Receivable can also be called trade receivables. |True False | |2. |Receivables not currently collectible are reported in the investments section of the balance sheet. | | | | |True False | |5. |Both Accounts Receivable and Notes Receivable represent claims that are expected to be collected in cash. | | | | |True False | |6. |When companies sell their receivables to other companies, the transaction is called factoring. | | | | |True False | |7. |Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible | | | |receivables. |True False | |8. |Generally accepted accounting principles do not normally allow the use of the direct write-off method of accounting for | | | |uncollectible accounts. |True False | |9. |The direct write-off method records Bad Debt Expense in the year the specific account receivable is determined to be | | | |uncollectible. |True False | |10. |When using the direct write-off method off accounting for uncollectible receivables, the account Allowance for Doubtful | | | |Accounts is debited when a specific account is determined to be uncollectible. | | | | |True False | |11. |When an account receivable that has been written off is subsequently collected, the account receivable must be reinstated. | | | | |True False | |12. |Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before| | | |adjusting entries are recorded at the end of the accounting period. | | | | |True False | |13. |Allowance for Doubtful Accounts is a liability account. |True False | |14. |When using the estimate based on sales method, the entry to record uncollectible accounts expense includes a credit to the | | | |Accounts Receivable account. |True False | |15....
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