Debt and Doubtful Accounts: Final Exam Questions – ACC211, Week 5

Summary

Students learn about debt and doubtful accounts in accounting. They get practice in answering multiple-choice questions on the topic.

Bad Debt Expense

Bad debt expense is the cost of a company's uncollectible receivables. Students learn how to calculate the required adjustment to record bad debts.

Average Collection Period

The average collection period is the time it takes for a company to receive payments owed by customers. Students need to calculate it in days.

Depreciation Methods

Depreciation spreads the cost of an asset over its useful life. Students compare straight-line and double-declining-balance methods of depreciation.

Intangible Assets

Intangible assets are non-physical assets. Students need to compute the total intangible assets on a balance sheet.

Key terms

Aging of accounts receivable

A list of customers' unpaid invoices organised by date.

Allowance for Doubtful Accounts

A contra-asset account that estimates the amount of receivables that will not be collected.

Straight-line depreciation

Depreciating an asset evenly over its useful life.

Double-declining-balance method

Depreciating an asset more in early years than in later years.

Component depreciation

Depreciating significant parts of a plant asset separately.

Current ratio

The proportion of a company's current assets to its current liabilities.

Questions this document helps with

• What does the balance in Allowance for Doubtful Accounts mean?
• How does the double-declining-balance method work?
• How does a company record a transaction paid with its own shares?

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