Author: Anonymous

AT&U CompanyData for the year ended December 31 are presented below: Sales (credit) $2,500,000 Sales returns and allowances 50,000 Accounts Receivable (December 31) 640,000 Allowance for Doubtful Accounts        (Before adjustment at December 31) 20,000 Estimated amount of uncollected accounts based on aging analysis 45,000   Refer to AT&U Company. If the company uses the aging of accounts receivable approach to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?

On December 1, Anson’s Drug Store concluded that a customer’s $325 account receivable was uncollected and that the account should be written off. What effect will this write-off have on the company’s net income and balance sheet totals assuming the direct write-off method is used to account for bad debts?

On October 1, ABC Company accepted a $50,000, 6%, six month note from a customer in lieu of an existing account. The journal entry necessary by ABC on October 1 would include:

Under the Sarbanes-Oxley Act of 2002, top management of publicly traded corporations have an increased responsibility for a system of internal controls that:

Net sales equals:

The account which records differences between amounts of cash deposited and amounts from the cash register tapes is called

The amount of cash in the cash register from sales totals $534.  The amount for sales recorded on the cash register tape was $530.  Which journal entry is required?

Dance Town AcademyThe items listed below were identified while preparing a bank reconciliation for the company’s checking account as of March 31. Cash balance according to the general ledger ? Bank statement balance $18,500 Outstanding checks 2,700 Customer’s bounced check 350 Bank service charges 100 Deposits in transit 1,000 Interest earned on the checking account 60 Refer to Dance Town Academy. How will the deposits in transit be handled on a bank reconciliation?

If a company erroneously records a $500 deposit as $50 in its records, which of the following must occur in a bank reconciliation to correct the error?

A-One ConstructionThe following data are from the company’s records for the year ended December 31: Accounts Receivable–January 1 $455,000 Credit sales during the year 900,000 Collections from credit customers during the year 825,000 Allowance for Doubtful Accounts        (Before adjustment at December 31) 2,100 Estimated uncollected accounts based on an aging analysis 29,200   Refer to A-One Construction. If the aging approach is used to estimate bad debts, what amount should be recorded as bad debt expense?