Liberty ACCT 211 Learnsmart Assignment 7 Answers Complete Solutions
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Although U.S. GAAP and IFRS have similar rules in recording disposition of receivables, Under U.S. GAAP provision refers to expense. Under IFRS, provision refers to
The direct write-off method records bad debts expense only when an account becomes uncollectible, which is not always in the same period as the sale. For this reason, the direct write-off method violates the principle.
_______ _______ are accounts of customers who do not pay what they have promised to pay. It’s considered an expense of selling on credit.
The principal and interest of a note are due on its maturity date. The maker of the note usually ______________ the note and pays it in full.
In July, Lane Co. sells merchandise to Avery Co. on account. In August, Avery pays the balance in full. The entry that Lane will make to record the receipt of cash will include a credit to the __________ account.
On December 1, Christy Co. accepted a 60-day, 6%, $1,000 note due January 30. On December 31, the appropriate year-end adjusting entry was made. On January 30, the note was honored and paid in full. The entry to record receipt of payment on January 30 (assuming no reversing entry was made) would include a credit to:
On March 14, Ian Co. accepted a 180-day, 5% note in the amount of $1,000 from All Co., a customer. On the due date of the note, Ali dishonors the note and fails to pay. The journal entry that Ian would record on the due date would include a:
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On March 14, Teal Co. accepted a 120-day, 6% note in the amount of $10,000 from AZC Co., a customer. On the due date of the note, AZC honors the note and pays in full. The journal entry that Teal would make to record payment of this note would include a credit to:
On December 31, DVS Company estimates that $2,500 of its accounts receivable balance is uncollectible. DVS uses the allowance method to account for bad debts. The entry to record this adjusting entry would include a:
On November 1, Eli Co. received a $6,000, 60-day, 6% note from a customer as payment on his $6,000 account. Eli’s journal entry to record this transaction in November 1, would include a:
Ana Co. uses the allowance method to account for bad debts. At the end of the period, Ana’s unadjusted trial balance shows an accounts receivable balance of $40,000; allowance for doubtful accounts balance of $300 (credit); and sales of $500,000. Based on history, Ana estimates that bad debts will be 2% of accounts receivable. The entry to record estimated bad debts will include a debit to bad debts expense in the amount of:
In August, Johns Co.’s account receivable balance was written off using the direct method. In November, Johns pays the balance in full. The journal to record the reinstatement of the account receivable must include a credit to the __________ account before recording a debit to the Cash account.
Flash Co. uses the allowance method to account for bad debts. At the end of 2010, Flash Co.’s unadjusted trial balance shows an accounts receivable balance of $45,000; allowance for doubtful accounts of $400 (debit); and sales of $1,500,000. Based on history, Flash estimates that bad debts will be 0.5% of sales. The entry to record estimated bad debts will include a debit to Bad Debts Expense in the amount of: