Multiple choice questions on accounts receivables and bad debts
1.Calistoga Produce estimates bad debt expense at 1/2 % of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2007. During 2008, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in bad accounts was written off.
Calistoga's 2008 bad debt expense is:
a.$1,720.
b.$1,650.
c.$1,505.
d.$1,575.
2.Calistoga Produce estimates bad debt expense at 1/2 % of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2007. During 2008, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in bad accounts was written off.
Calistoga's accounts receivable at December 31, 2008, are:
a.$467,000.
b.$473,280.
c.$465,280.
d.$469,280.
3.Calistoga Produce estimates bad debt expense at 1/2 % of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $471,000 and $1,650 respectively, at December 31, 2007. During 2008, Calistoga's credit sales and collections were $315,000 and $319,000, respectively, and $1,720 in bad accounts was written off.
Calistoga's adjusted allowance for uncollectible accounts at December 31, 2008, is:
a.$1,575.
b.$1,505.
c.$1,650.
d.$1,720.
4.The largest expense on a retailer's income statement is typically:
a.Salaries and wages.
b.Cost of goods sold.
c.Income tax expense.
d.Depreciation expense.
5.In a periodic inventory system, the cost of goods sold is determined:
a.each time a sale occurs.
b.each time a purchase occurs.
c.at the end of the accounting period.
d.None of the above