Question

True/False Indicate whether the statement is true or false, 1. Receivables from company owners and officers should be disclosed separately on the balance sheet. 2. Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables. 3. The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use. 4. During construction of a building, the cost of interest on a construction loan should be charged to an expense account. 5. For an interest bearing note payable, the amount borrowed is equal to the face amount of the note. 6. Internal controls for cash payments also apply to payrolls. Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The receivable that is usually evidenced by a formal instrument of credit is a(n) a. trade receivable. b. note receivable. c. accounts receivable. d. income tax receivable. 2. The two methods of accounting for uncollectible receivables are the allowance method and the a. equity method b. direct write-off method c. interest method d. cost method 3. The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. The entry to write off an account that has been determined to be uncollectible would be as follows: a. debit Allowance for Doubtful Accounts; credit Accounts Receivable b. debit Sales Returns and Allowance, credit Accounts Receivable c. debit Uncollectible Accounts Expense; credit Allowance for Doubtful Accounts d. debit Accounts Receivable, credit Uncollectible Accounts Expense e. debit Uncollectible Accounts Expense; credit Accounts Receivable

Answer 1

M Answer - 91T Note: - every Related party transaction should be disclosed separatly in financial statement 2) T. Notes in Allowances Method we predetermine the Ant of Uncollectable Receivable by Applying son Amit of Recoivable. in Advance 3. To Note! - all Cost to get the assets in place Ready for Use Should Included in PPOE and Cost of 4. F. Note! Cost of Interest on a Construction loan should be capitalized to the lost of Construction 5:)T. Note for an interest bearing Nole poyable. the amount borrowed is equal to the face Amount of the mote

MRC M- M+ GOT Note! Internal Control for Cash opplys to payrolls. as both hre. Payment of Cash payment also Case are same Multiple choice! (b) Note Receivable 2) (6.) direct write-off Method e) debit Uncollectible Account Receivable Accounts Expenses, credit