The data presented below is for Mellon Corporation for the year ended December 31, 2015: Sales (100% on credit) $1,500,000 Sales returns 60,000 Accounts Receivable (December 31, 2015) 250,000 Allowance for Doubtful Accounts (Before adjustment at December 31, 2015) 3,000 Estimated amount of uncollectible accounts based on an aging analysis 31,000 Refer to the data for Mellon Corporation. If Mellon
estimates its bad debts at 2% of net credit sales, what amount will be reported as bad debt expense for 2015?
a. $25,800
b. $27,000
c. $28,800
d. $30,000
c
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The following set of items describes activities completed by a company in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. An employee in the accounting department records cash receipts from customers and prepares a bank deposit slip
a. Adheres to sound internal control procedures b. Violates sound internal control procedures c. Neither strengthens nor violates internal control
Which of the following methods of recording uncollectible accounts expense would be described best as an income statement method?
a. Both direct charge-off method and accounts receivable aging method b. Direct charge-off method c. Percentage of net sales method d. Accounts receivable aging method
The post-closing trial balance differs from the adjusted trial balance in that it does not
A) take into account dividends. B) take into account adjusting entries. C) include income statement accounts. D) include balance sheet accounts.
The perpetual system requires that each sale of merchandise has two entries: the revenue side and the cost side.
Answer the following statement true (T) or false (F)