Accounting for accounts receivable Fill-in-the-blanks quiz
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Question: 1
When goods are sold on credit,
account is debited and
account is credited.
Question: 2
is allowed to credit customers to encourage them to make prompt payments.
Question: 3
Cash discount is also known as
.
Question: 4
The payment terms 2/15, n/30 means that a
discount would be allowed if the payment is made within 15 days. Otherwise, full amount is payable within 30 days.
Question: 5
When cash is collected from credit customers,
account is debited and
account is credited.
Question: 6
The sales discount account is a
revenue account.
Question: 7
The sales discount is deducted from
to arrive at net sales.
Question: 8
Sales discount forfeited is reported as
on the income statement.
Question: 9
Accounts receivable that cannot be collected because of bankruptcy or another reason are called
.
Question: 10
Face value of accounts receivable -
= Net realizable value of accounts receivable.
Question: 11
When adjusting entry to recognize uncollectible accounts expense is made under allowance method,
account is debited and
account is credited.
Question: 12
The uncollectible accounts expense account is closed to
account.
Question: 13
The
account is a contra asset account that reduces the gross amount of accounts receivable to their
value.
Question: 14
When a receivable is written off under allowance method,
account is debited and
account is credited.
Question: 15
The Naxum Company uses aging method to estimate the allowance for doubtful accounts. On December 31, 2018, the existing balance in allowance for doubtful accounts account is $20,000 and the required balance in this account is $22,000. The adjusting entry on December 31, 2018 would be made in the amount of
.
Question: 16
The Noran Company estimates that 2% of its total credit sales will prove to be uncollectible. The existing balance in allowance for doubtful accounts account is $4,000. If the credit sales for the year 2018 are $50,000, the adjusting entry on December 31, 2018 would be made for the amount of
.
Question: 17
A promissory note is written by a
in favor of a creditor.
Question: 18
Factoring means selling
to a financial instituion at a discount.
Question: 19
The institution to whom receivables are sold is known as
.
Question: 20
When accounts receivable are factored without recourse, the
bears the loss resulting from bad debts.
Question: 21
In a factoring
, the seller guarantees the collection of accounts receivable.
Question: 22
When accounts receivable are converted into notes receivable,
account is debited and
account is credited.
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