What are the three classifications of receivables?
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1. What are the three classifications of receivables?
2. Dan’s Hardware is a small hardware store in the rural township of Twin Bridges. It rarely extends credit to its customers in the form of an account receivable. The few customers who are allowed to carry
3. What kind of an account (asset, liability, etc.) is Allowance for Doubtful Accounts, and is its normal balance a debit or a credit?
4. After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $673,400 and Allowance for Doubtful Accounts has a balance of $11,900. Describe how the accounts receivable and the allowance for doubt-ful accounts are reported on the balance sheet.
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- 2. Dan’s Hardware is a small hardware store in the rural township of Twin Bridges. It rarely extends credit to its customers in the form of an account receivable. The few customers who are allowed to carry accounts receivable are long-time residents of Twin Bridges with a history of doing business at Dan’s Hardware. What method of accounting for uncollectible receivables should Dan’s Hardware use? Why? 3. What kind of an account (asset, liability, etc.) is Allowance for Doubtful Accounts, and is its normal balance a debit or a credit? 4. After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $673,400 and Allowance for Doubtful Accounts has a balance of $11,900. Describe how the accounts receivable and the allowance for doubt-ful accounts are reported on the balance sheet.Which of the following is not a reason for the Jones Hardware Store to accept credit cards from customers? Group of answer choices A)Jones can receive its money faster than if it directly extended credit to the customer by an account receivable. b)The credit card company offers a discount to Jones so that Jones will have more money available for operations. C)Jones will not have to be concerned with nonsufficient funds checks from customers. d)Jones will not have to have extra office workers to make phone calls to customers requesting collections on accounts. E)All these are reasons to accept credit cards.The bill of exchange written by W states that BPI Family Savings Bank will get the reimbursement of the payment from W’s savings account. What element is present in this situation? A. There is an unconditional order to pay. B. There is period to pay the bill. C. It is payable to order D. None of the above The bill of exchange written by X indicates that for the payee to receive the money from the drawee bank, the payee must first sell his house and car and give the proceeds to charity. What element is present in this situation? A. There is an unconditional order to pay. B. There is period to pay the bill. C. It is payable to order D. None of the above
- Rush Co has a credit balance of RM54 in Jack Co’s receivables ledger. Which of these would explain this balance? A. Rush Co received a credit note for RM54 from Jack but Jack posted in the account of Twice Co. B. Rush Co sent a cheque to Jack for RM46 in respect of an invoice of RM100. C. Rush Co paid an invoice RM54, even though this invoice was subsequently cancelled. D. Rush Co bought but returned goods to Jack, totaling RM54. A credit note is yet to be issued.A friend owns a business that extends credit to its customers. The friend has asked you to helps with estimating uncollectible accounts and wants you to make a recommendation. Specifically, your friend is asking: Which of the two methods of estimating uncollectible provides for the most accurate estimate of the current net realizable value of the receivables?BK owns a small business in a small-town call Twapiasea in the Dormaa District call the PiGMenEnterprise. BK does not keep full set of accounts. The following records has been obtained in respected of the year ended 31st December 2019Summary of Bank AccountsGHS GHS Bal b/d 4,820.00 Sundry Expenses 1,560.00 Receipt from Trade Receivables 94,608.00 Payment to Trade Payables 76,040.00 Insurance 2,640.00 Rent 5,200.00 Equipment 4,000.00 Drawings 7,200.00 Bal c/d 2,788.00 99,428.00 99,428.00 BK made cash sales of GHS 13,336.00 and use this to pay the following;GHSWages and Salary 12,427.00Sundry Expenses 106.00Cash Purchase 803.00He took for his use GHS 260.00 worth of good. A discount of GHS 87.00 had been allowed to BK for prompt payment of trade payable.The following information was also available:1st January 2019 31st December 2019GHS GHSEquipment 8, 400.00 9,920.00Rent Accrued 400.00 ----------Trade Receivable 7,360.00 9,900.00Trade Payable 5,928.00 6,836.00Insurance Prepaid 420.00…
- please answer these 2 questions. Their pictures are attached as well 1. Under the allowance method, which of the following does not change the balance in the Accounts Receivable account? A) Collections on customer accounts. B) Write-offs. C) Returns on credit sales D) Bad debt expense adjustment. 2. On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on November 17. How would Flores record the collection of cash on November 17? A. Cash 7,840 Accounts Receivable. 7,840 B. Cash 7,840 Sales Discount 160 Accounts Receivable 8,000 C. Cash 7,840 Sales Revenue 160 Accounts Receivable 8000 D. Cash 8000 Accounts Receivable 8000Which of the following is not an example of control procedures over accounts receivable? A.Monitoring the total amount of "credit card sales" and investigating reasons for increases in the amount B.Sending monthly statements to customers who purchased on credit C.Denying additional credit to customers with very overdue accounts D.Requiring customers complete a credit application before granting credit to the customerElton John, a friend of yours, overheard a discussion at work about changes his employer wants to make in accounting for uncollectible accounts. John knows little about accounting, and he asks you to help make sense of what he heard. Specifically, he asks you to explain the differences between the percentage-of-sales, percentage-of-receivables, and the direct write-off methods for uncollectible accounts. Instructions In a letter of one page (or less), explain to John the three methods of accounting for uncollectibles. Be sure to discuss differences among these methods. Elton John, a friend of yours, overheard a discussion at work about changes his employer wants to make in accounting for uncollectible accounts. John knows little about accounting, and he asks you to help make sense of what he heard. Specifically, he asks you to explain the differences between the percentage-of-sales, percentage-of-receivables, and the direct write-off methods for uncollectible accounts. Instructions In…
- Calculation of Net Realizable Value K. L. Dearborn owns a department store that has a $45,500 balance in Accounts Receivable and a $3,000 credit balance in Allowance for Doubtful Accounts. 1. Determine the net realizable value of the accounts receivable? 2. Assume that an account receivable in the amount of $500 was written off using the allowance method. Determine the net realizable value of the accounts receivable after the write-off?Pinky is confused about the lack of agreement between the cash balance per books andthe balance per the bank. Explain the causes for the lack of agreement to Pinky, and givean example of each cause. Mahmudul extended credit to customer Shanawaz in the amount of $130,900 for hispurchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost ofthe purchase to Mahmudul is $56,200. On September 4, Mahmudul determined thatShanawaz account was uncollectible and wrote off the debt. On December 3 Shanawazunexpectedly paid in full on his account.Required: Record each Mahmudul transaction with Shanawaz. In order to demonstratethe write-off and then subsequent collection of an account receivable, assume in thisexample that Mahmudul extends credit directly, so this transaction is permitted to use thedirect write-off method. Remember, however, that in most cases the direct write-offmethod is not allowed. Efaz Company has been using the FIFO cost flow method during a…The direct write-off method is used by all of the following businesses except a.those that sell most of their goods or services for cash. b.those that sell certain kinds of merchandise, like restaurants or convenience stores. c.those that accept only MasterCard or VISA for sales other than cash. d.those that have receivables as a large part of their current assets.