True/False
Indicate whether the sentence or statement is true
or false.
|
|
|
1.
|
Of
the two methods of accounting for uncollectible receivables, the allowance method provides in advance
for uncollectible receivables.
|
|
|
2.
|
Uncollectible Accounts Expense is a contra asset account.
|
|
|
3.
|
The
difference between Accounts Receivable and its contra asset account is called net realizable
value.
|
|
|
4.
|
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.
|
|
|
5.
|
At
the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a credit
balance of $250, and net sales on account for the period total $500,000. If uncollectible accounts
expense is estimated at 1% of net sales on account, the current provision to be made for
uncollectible accounts expense is $5,000.
|
|
|
6.
|
At
the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a debit
balance of $500, and net sales on account for the period total $800,000. If uncollectible accounts
expense is estimated at 1% of net sales on account, the current provision to be made for
uncollectible accounts expense is $8,500.
|
|
|
7.
|
Allowance for Doubtful Accounts is a contra asset account.
|
|
|
8.
|
The
difference between the balance in Accounts Receivable and the balance in Allowance for Doubtful
Accounts at the end of a period is referred to as the expected net realizable value of the accounts
receivable.
|
|
|
9.
|
At
the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a debit
balance of $2,000. If the estimate of uncollectible accounts determined by aging the receivables is
$30,000, the current provision to be made for uncollectible accounts expense is
$32,000.
|
|
|
10.
|
At
the end of a period, before the accounts are adjusted, Allowance for Doubtful Accounts has a credit
balance of $5,000. If the estimate of uncollectible accounts determined by aging the receivables is
$50,000, the current provision to be made for uncollectible accounts expense is
$55,000.
|