Question: 1. Reba wishes to know how much would be in her savings account if she deposits a given sum in an account and leaves it there at 6% interest for five years. She should use a table for the:
A) Future value of an ordinary annuity of 1.
B) Present value of 1.
C) Future value of an annuity due of 1.
D) Present value of an annuity due of 1.
E) None of these.
2. The following information is available for Murphy Company: Allowance for doubtful accounts at December 31, 2009 $ 8,000 Credit sales during 2010 400,000 Accounts receivable deemed worthless and written off during 9,000 2010 As a result of a review and aging of accounts receivable in early January 2011, however, it has been determined that an allowance for doubtful accounts of $5, 500 is needed at December 31, 2010. What amount should Murphy record as "bad debt expense" for the year ended December 31, 2010?
A) $4, 500
B) $5, 500
C) $6, 500
D) $13, 500
E) None of the above.
3. AG Inc. made a $ 10,000 sale on account with the following terms: 2/10, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?
A) Debit Accounts Receivable for $9, 800.
B) Debit Accounts Receivable for $9, 800 and Sales Discounts for $200.
C) Debit Accounts Receivable for $ 10,000.
D) Debit Accounts Receivable for $ 10,000 and Sales Discounts for $200.
E) None of the above.