Multiple Choice Questions

The accounting principle that requires financial statements (including notes) to report all relevant information about the operations and financial condition of a company is called:
  • full disclosure.
  • allowance method of accounting for bad debts.
  • aging of accounts receivable method.
  • no effect on the expenses of the current period.
An accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period of the sales and (2) reports accounts receivable at the amount of cash to:
  • allowance method of accounting for bad debts.
  • full disclosure.
  • no effect on the expenses of the current period.
  • aging of accounts receivable method.
If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in:
  • allowance method of accounting for bad debts.
  • no effect on the expenses of the current period.
  • the use of the allowance method of accounting for bad debts.
  • aging of accounts receivable method.
A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:
  • aging of accounts receivable method.
  • allowance method of accounting for bad debts.
  • is a note receivable for the recipient.
  • no effect on the expenses of the current period.
A promissory note:
  • is the day the note is due to be paid.
  • is a written promise to pay a specified amount of money at a certain date.
  • the use of the allowance method of accounting for bad debts.
  • is a note receivable for the recipient.
The person who signs a note receivable and promises to pay the principal and interest is the:
  • is a note receivable for the recipient.
  • bad debt expense can be estimated by the percent of accounts receivable method, or by the aging of accounts receivable method.
  • full disclosure.
  • maker.
The matching principle requires:
  • is a written promise to pay a specified amount of money at a certain date.
  • the use of the allowance method of accounting for bad debts.
  • is the day the note is due to be paid.
  • no effect on the expenses of the current period.
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Multiple Choice Questions
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