Accounts Receivable & Bad Debts Expense(Quick Test #2)

1. The report that sorts a company’s accounts receivables into current, 1-30 days past due, 31-60 days past due, etc. is referred to as the __________ of accounts receivable.

2. In order to encourage customers to remit amounts owed, a company will send __________ that report the amounts owed.

3. The terms FOB shipping point means that the __________ is responsible for the freight costs.

4. A sales invoice of $3,000 is dated July 7 and its credit terms are 2/10, net 30. If the invoice is paid on July 16, the amount that should be received by the seller is $__________.

5. A company deposited one of its customer’s checks that it received as payment on a previous credit sale. A week later the customer’s check was returned to the company with the words “Account Closed”. The entry to record the returned check should include a __________ to Accounts Receivable.

6. Pledged accounts receivables are receivables that a lender uses as __________ for a loan.

7. A credit __________ is an organization that provides information on customers’ and potential customers’ credit ratings.

8. An arrangement with a bank for a company’s credit customers to remit amounts directly to the bank is known as a __________ account.

9. Trade receivables other than promissory notes are recorded in the account entitled Accounts Receivable.

10. If goods are shipped FOB shipping point, the seller is responsible for the goods until they are delivered to the buyer.

11. The balance needed in the account Allowance for Doubtful Accounts is $__________.

12. In order to get the balance needed in Question 11, a credit of $__________ needs to be entered in the Allowance for Doubtful Accounts.

13. The name of the account to be debited when making the entry in Question 12 is __________ __________ __________.

14. The allowance method is required for reporting accounts receivables and bad debts expense on a company’s financial statements. However, for income tax reporting the __________ write-off method is required.

15. Typically the seller of goods on credit has this type of claim against the buyer of the goods.