Ch 14 Accounting
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| The adjusting entry for uncollectible accounts reduces the balance of the Accounts Receivable account. | false
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| When using the allowance method, writing off an uncollectible account does not change the net realizable value of accounts receivable | true
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| After our customer signs a Promissory Note, what account do we transfer the balance of their debt to | Notes Receivable
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| The accounting concept Neutrality is applied when the process of making accounting estimates is free from bias. | true
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| A promissory note provides the business with legal evidence of the debt should it be necessary to go to court to collect | true
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| Does the book value of accounts receivable differ before and after writing off an account? | remains the same
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| A business usually knows at the end of the fiscal year which customer accounts will become uncollectible. | false
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| Total assets are reduced when a business accepts a note receivable from a customer needing an extension of time to pay an account receivable. | false
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| Crediting the estimated value of uncollectible accounts to a contra account | allowance method
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| The account Allowance for Uncollectible Accounts is reported on the income statement. | Interest Income (Allowance for Uncollectible Accounts is reported in balance sheet)
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| The book value of accounts receivable must be a reasonable and unbiased estimate of the money the business expects to collect in the future. | true
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| Interest income is classified as | other revenue
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| Canceling the balance of a customer account because the customer does not pay | Writing off an account
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| A written and signed promise to pay a sum of money at a specified time. | Promissory Note
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| The original amount of a note, sometimes referred to as the face amount. | Principle
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| The amount of accounts receivable a business expects to collect | Net realizable value
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| The percentage of the principal that is due for the use of the funds secured by a note | Interest Rate
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| The interest earned on money loaned | Interest Income
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| The difference between an asset’s account balance and its related contra account | book value
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| Analyzing accounts receivable according to when they are due. | Aging of Accounts Receivable
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| Why is a customer account reopened when the account is paid after being previously written off? | to show accurate credit history and the account was eventually paid
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| A business having a $400.00 debit balance in Allowance for Uncollectible Accounts and estimating its uncollectible accounts using accounts receivable aging to be $5,000.00 would record a $5,400.00 credit to Allowance for Uncollectible Accounts. | true
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| The direct write-off method complies with generally accepted accounting principles | true-the write-off method complies direct write-off does not because it makes revenue and expenses not match
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| The expense of an uncollectible account should be recorded in the accounting period that the account becomes uncollectible. | false
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| Interest rates are stated as a percentage of the principal. | true
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| The allowance method of accounting for uncollectible accounts does not comply with generally accepted accounting principles | false
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| When a customer account is written off under the allowance method, the book value of accounts receivable decreases | false
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| What’s another name for uncollectible accounts | bad debt
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| The account Allowance for Uncollectible Accounts has | a natural (normal) credit balance
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| The percent of each age group of an accounts receivable aging that is expected to become uncollectible is determined by generally accepted accounting principles | Securites and Exchange Commision
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