Provide any additional journal entries or adjusting journal entries needed to properly record accounts receivableand allowance for doubtful accounts.→ BrandMakers maintains a subsidiary ledger for accounts receivable.→ Note that BrandMakers does not offer sales discounts. Also, BrandMakers does not have oneuniform set of payment terms.→ Payment terms are specified in the contract.→ In prior years, BrandMakers utilized the following percentages as estimates of uncollectibleaccounts. BrandMakers will use the same percentages in the current year.Aging CategoryCurrent1-30 days past due31-60 days past dueGreater than 60 days past duePercent Estimatedto be Uncollectible1%5%10%25%→ The ledger for the beginning of the year and the end of the year can be found in the attachedpicture. Also, this worksheet includes an analysis of what occurred during the current year in theaccounts that were open as of the beginning of the year. Aging CategoryCurrent1-30 days past due31-60 days past dueGreater than 60 days past dueClientClientYZZBBBDDDEEEHHHJJJDateABC 12/15/2021 240,000 2/1/2022 (32)DEF 11/28/2021 456,500 1/15/2022 (15)GHI 11/2/2021 136,544 11/15/2021 46JKL 10/9/2021 389,400 10/15/202177MNO 9/3/2021 245,000 9/30/2021 92PQR 12/12/2021 332,000 12/10/2021 21STU 11/28/2021 250,000 12/28/2021VWX 11/10/2021 122,000 11/29/2021YZZ 10/1/2021 292,500 11/20/2021TOTAL2,463,9443FULDateAmount Date Due AgeBeginning of Year Subsidiary Ledger and Computation of Allowance BalanceAmount Date Due3241Percent Estimatedto be Uncollectiblecurrent12/15/2021 292,500 11/20/2021 4066/5/2022 225,000 11/9/2022 527/14/2022 157,000 10/14/2022 7810/22/2022 253,681 12/24/2022 711/17/2022 532,700 1/22/2023 (22)5/29/2022 370,100 8/13/2022 1401%1%Age Current1%5%10%25%End of Year Subsidiary Ledger1%1-30 31-60 >605%5%10%5%10%10%1-30 31-6010%25%25%>6025%25%25%Percent1%1%10%25%25%5%5%10%10%Percent25%10%25%5%1%25%Allowance2,4004,56513,65497,35061,25016,60012,50012,20029,250249,769Allowance73,12522,50039,25012,6845,32792,525Date Paid1/28/20221/17/20222/5/20225/7/20221/5/20221/10/20221/15/2022Date WrittenOff11/30/2022Transactions During Current YearAmountreceived in 2022240,000456,500389,400245,000332,000250,000122,0002,034,900Amount Written Amount Still OutstandingOff in 202212/31/2022136,544136,544292,500292,500

The accounting cycle is a collective process of identifying, analyzing, and recording the events or…

Provide any additional journal entries or adjusting journal entries needed to properly record accounts receivable and allowance for doubtful accounts. → BrandMakers maintains a subsidiary ledger for accounts receivable. → Note that BrandMakers does not offer sales discounts. Also, BrandMakers does not have one uniform set of payment terms. ⇒ Payment terms are specified in the contract. ⇒ In prior years, BrandMakers utilized the following percentages as estimates of uncollectible accounts. BrandMakers will use the same percentages in the current year. Aging Category Current Percent Estimated to be Uncollectible 1%

Provide any additional journal entries or adjusting journal entries needed to properly record accounts receivable and allowance for doubtful accounts. → BrandMakers maintains a subsidiary ledger for accounts receivable. → Note that BrandMakers does not offer sales discounts. Also, BrandMakers does not have one uniform set of payment terms. ⇒ Payment terms are specified in the contract. ⇒ In prior years, BrandMakers utilized the following percentages as estimates of uncollectible accounts. BrandMakers will use the same percentages in the current year. Aging Category Current Percent Estimated to be Uncollectible 1%

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Activities Required In Completing A Quality Audit

Section: Chapter Questions

Problem 65RSCQ

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Indicate whether each statement best describes the allowance method or the direct write-off method. List 1. When an account is written off, debit Allowance for Doubtful Accounts. 2. Usually does not best match sales and expenses because Bad Debts Expense is not recorded until an account becomes uncollectible, which usually occurs in a period after the credit sale. 3. Bad Debts Expense is recorded in the period in which the related sales occur. 4. Bad Debts Expense is recorded when an account is determined to be uncollectible. 5. An adjusting entry is generally required at the end of each period to estimate bad debts. 6. The write-off of a specific customer account directly affects net income in that period. < Prev of 9 ‒‒‒ Method Allowance Direct Write-off D
Which of the following statements is true regarding aging accounts receivable? Multiple Choice O O O All of the statements are true. An aging schedule is used to improve the estimate used in the percent of revenue method of determining the uncollectible accounts expense. The aging of accounts receivable involves applying lower uncollectible percentage estimates to older receivables. The aging method of estimating uncollectible accounts is based on the assumption that the longer an account receivable remains outstanding, the less likely it is to be collected.
Using Corney Company's accounts receivable disclosures and the following information, answer the questions below. NOTE 1: Accounting Policies Accounts Receivable Accounts receivable consists principally of trade receivables, which are recorded at the invoiced amount, net of allowances for doubtful accounts and prompt payment discounts. Trade receivables do not bear interest. The allowance for doubtful accounts represents management's estimate of the amount of probable credit losses in existing accounts receivable, as determined from a review of past due balances and other specific account data. Account balances are written off against the allowance when management determines the receivable is uncollectible. For the years ended 2019 and 2018, the Company did not have off-balance sheet credit exposure related to its customers. NOTE 18 SUPPLEMENTAL FINANCIAL STATEMENT DATA Consolidated Balance Sheet (millions) 2019 2018 Trade receivables…
Using Corney Company's accounts receivable disclosures and the following information, answer the questions below. NOTE 1: Accounting Policies Accounts Receivable Accounts receivable consists principally of trade receivables, which are recorded at the invoiced amount, net of allowances for doubtful accounts and prompt payment discounts. Trade receivables do not bear interest. The allowance for doubtful accounts represents management's estimate of the amount of probable credit losses in existing accounts receivable, as determined from a review of past due balances and other specific account data. Account balances are written off against the allowance when management determines the receivable is uncollectible. For the years ended 2019 and 2018, the Company did not have off-balance sheet credit exposure related to its customers. NOTE 18 SUPPLEMENTAL FINANCIAL STATEMENT DATA Consolidated Balance Sheet (millions) 2019 2018 Trade receivables…
S1: The term “past due” refers to the period before the maximum credit term. S2: The rate for estimating doubtful accounts is usually determined using future experiences of the entity S3: Direct write off method does not require recognition for a doubtful account. S4: The unadjusted allowance for doubtful accounts is ignored in determining the doubtful account expense in percent of sale method. a. All statements are correct. b. All statements are incorrect. c. Only two statements are correct. d. Only one statement is correct. e. Only one statement is incorrect.
Under the direct write-off method of accounting for uncol-lectible accounts: a. The current year uncollectible accounts expense is lessthan the expense would be under the allowance approach.b. The relationship between the current period net sales and current period uncollectible accounts expense illus-trates the matching principle.
Which of the following statements is true regarding the two allowance procedures used to estimate bad debts? Oa. The percentage of net credit sales method takes into account the existing balance in the Allowance for Doubtful Accounts account. Ob. The aging of accounts receivable method takes into account the existing balance in the Allowance for Doubtful Accounis account. Oc, The direct write-off method does a better job of matching revenues and expenses. Od. The direct write-off method takes into account the existing balance in the Allowance for Doubtful Accounts account.
Which of the following statements is true regarding aging accounts receivable? Multiple Choice The aging method of estimating uncollectible accounts is based on the assumption that the longer an account receivable remains outstanding, the less likely it is to be collected. All of the statements are true. The aging of accounts receivable involves applying lower uncollectible percentage estimates to older receivables. An aging schedule is used to improve the estimate used in the percent of revenue method of determining the uncollectible accounts expense.
Which statement is false? a. The amount of Accounts Receivable pledged should be excluded from Accounts Receivable in the balance sheet. b. When Accounts Receivable are assigned on a notification basis, the company reduces liability and Accounts Receivable account for the net amount of collections of Accounts Rceivable. c. In factoring Accounts Receivable as a continuing agreement, the buyer of Accounts Receivable protects himself from risks arising from discounts, returns and allowances thru by withholding a portion of the amount of accounts receivable. e. none of the above Please explain.
Choose the correct and explain. The following statements pertain to presentation and valuation of receivables. Which is not in accordance with generally accepted practice? a.Credit balances in customers’ account receivable should be offset against other receivables to arrive at the net amount. b.Receivable balances should be valued at face amount minus allowance for doubtful accounts and for any anticipated adjustments, which in the normal course of events will reduce the amount of receivable to estimated realizable value. c.Long-term notes receivables which nominally bear no interest or an interest, which is unreasonably low should be stated at present value. d.Receivables denominated in foreign currency should be translated to local currency using the exchange rate on reporting period.
Indicate whether each statement best describes the allowance (A) method or the direct write-off (DW)method. Usually does not best match sales and expenses because bad debts expense is not recorded until an account becomes uncollectible, which usually occurs in a period after the credit sale.
1. Which of the following is correct when a company uses the net price method of recording receivables? a. The company records the total invoice price in both the "Accounts Receivable" and "Sales" accounts at the time of sale as if no cash discount is involved b. Sales discount taken is deducted from sales on the income statement to determine net sales c. Cash discount is reflected in the accounting records only when the discount is taken d. Cash discount is reflected in the accounting records only when the discount is not taken e. none of the above