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Chapter #9 Name MULTIPLE CHOICE QUESTIONS 1. Interest is usually associated with a. accounts receivable b. notes receivable c. doubtful accounts. d. bad debts. 2. Under the allowance method, writing off an uncollectible account a. affects only balance sheet accounts b. affects both balance sheet and income statement accounts. c. affects only income statement accounts. d. is not acceptable practice. 3. The net amount expected to be received in cash from receivables is termed the a. cash realizable value. b. cash-good value c. gross cash value d. cash-equivalent value. If a company fails to record estimated bad debts expense, a. cash realizable value is understated b. expenses are understated c. revenues are understated d. receivables are understated. 4. When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when a. a sale is made. b. an account becomes bad and is written off c. management estimates the amount of uncollectibles d. 5. a customer's account becomes past-due. 6. When an account becomes uncollectible and must be written off, a. Allowance for Doubtful Accounts should be credited b. Accounts Receivable should be credited. c. Bad Debts Expense should be credited. Sales should be debited. d. A debit balance in the Allowance for Doubtful Accounts a. is the normal balance for that account. b. indicates that actual bad debt write-offs have exceeded previous provisions for bad 7. debts. c. indicates that actual bad debt write-offs have been less than what was estimated. d. cannot occur if the percentage of sales method of estimating bad debts is used

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