Multiple choice questions on accounts receivables and bad debts
1.On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.
What is the correct entry for Flores on November 10?
|
Accounts receivable
|
7,840
|
|
|
Sales
|
|
7,840
|
|
Accounts receivable
|
8,000
|
|
|
Sales
|
|
8,000
|
|
Accounts receivable
|
7,840
|
|
|
Cash discounts
|
160
|
|
|
Sales
|
|
8,000
|
|
Accounts receivable
|
8,000
|
|
|
Cash discounts
|
|
160
|
|
Sales
|
|
7,840
|
2.On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.
What is the correct entry for Flores on November 17, assuming the correct payment was received on that date?
|
Cash
|
7,840
|
|
|
Accounts receivable
|
|
7,840
|
|
Cash
|
7,840
|
|
|
Sales discounts
|
160
|
|
|
Accounts receivable
|
|
8,000
|
|
Cash
|
7,840
|
|
|
Sales
|
160
|
|
|
Accounts receivable
|
|
8,000
|
|
Cash
|
8,000
|
|
|
Sales discounts
|
160
|
|
|
Accounts receivable
|
|
8,000
|
|
Sales
|
|
160
|
3.On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.
What is the correct entry for Flores on December 5, assuming the correct payment was received on that date?
|
Cash
|
8,000
|
|
|
Accounts receivable
|
|
7,840
|
|
Discounts revenue
|
|
160
|
|
Cash
|
8,000
|
|
|
Accounts receivable
|
|
7,840
|
|
Interest revenue
|
|
160
|
|
Cash
|
8,160
|
|
|
Accounts receivable
|
|
8,000
|
|
Interest revenue
|
|
160
|
|
Cash
|
8,000
|
|
|
Accounts receivable
|
|
8,000
|
4.On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30.
What entry would Flores make on November 17, assuming the correct payment was received on that date if the net method of accounting for cash discounts had been used instead?
|
Cash
|
7,840
|
|
|
Accounts receivable
|
|
7,840
|
|
Cash
|
7,840
|
|
|
Sales discounts
|
160
|
|
|
Accounts receivable
|
|
8,000
|
|
Cash
|
7,840
|
|
|
Sales
|
160
|
|
|
Accounts receivable
|
|
8,000
|
|
Cash
|
8,000
|
|
|
Sales discounts
|
160
|
|
|
Accounts receivable
|
|
8,000
|
|
Sales
|
|
160
|
5.On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30.
What entry would Flores make on December 10, assuming the correct payment was received on that date if the net method of accounting for cash discounts was used instead?
|
Cash
|
8,000
|
|
|
Accounts receivable
|
|
7,840
|
|
Discounts revenue
|
|
160
|
|
Cash
|
8,000
|
|
|
Accounts receivable
|
|
7,840
|
|
Interest revenue
|
|
160
|
|
Cash
|
8,160
|
|
|
Accounts receivable
|
|
8,000
|
|
Interest revenue
|
|
160
|
|
Cash
|
8,000
|
|
|
Accounts receivable
|
|
8,000
|