Asked by morgan lewallen on Jun 29, 2024
Verified
A contra asset that represents the amount of estimated uncollectible receivables
A) Accounts receivable turnover
B) Net realizable value
C) Accounts receivable
D) Aging the receivables
E) Receivables
F) Direct write-off method
G) Allowance for doubtful accounts
H) Bad debt expense
I) Notes receivable
Contra Asset
An account on a company's balance sheet that reduces the total amount of the asset accounts, often used to account for depreciation or allowances for bad debts.
Uncollectible Receivables
Financial claims that are recognised as losses because they cannot be collected, typically due to debtor default.
Allowance for Doubtful Accounts
A contra-asset account used to estimate the portion of a company's accounts receivable that may not be collected.
- Understand the concepts and terminology related to accounts receivable and notes receivable.
- Identify and apply methods for estimating uncollectible accounts.
Verified Answer
Answer: B
Net realizable value is the value of the receivables after deducting the allowance for doubtful accounts.
Answer: C
Accounts receivable are amounts owed by customers for goods or services already provided.
Answer: D
Aging the receivables is the process of analyzing the age of account receivables to estimate the likelihood of collection.
Answer: E
Receivables are assets representing amounts due to a company, which can include accounts receivable, notes receivable, and other forms of debt.
Answer: F
The direct write-off method is a method of accounting for bad debts that directly charges the uncollectible amount to expense at the time it is determined to be uncollectible.
Answer: H
Bad debt expense is the expense recognized when customers do not pay their accounts receivable.
Answer: I
Notes receivable are written promises to pay a certain amount on a future date.
Answer: A
Accounts receivable turnover is a measure of how many times a company collects its average accounts receivable balance during a period.
Learning Objectives
- Understand the concepts and terminology related to accounts receivable and notes receivable.
- Identify and apply methods for estimating uncollectible accounts.
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