Louisiana State University, Shreveport ACCT 701 Chapter 9 Self-Test Indicate whether each of the following statements is true or false

Louisiana State University, Shreveport

ACCT 701

Chapter 9 Self-Test Indicate whether each of the following statements is true or false.

1)The percentage-of-sales method estimates the uncollectible accounts from the ending

balance in Accounts Receivable.

2. Under the allowance method, uncollectible accounts expense is recognized when a specific

customer's account is written off.

3. Bank credit card sales are treated as cash sales because the receipt of cash is certain.
4. Liabilities result from some future transaction.
5. Current liabilities are classified as clearly determinable, estimated, and contingent.
6. A dishonored note is removed from Notes Receivable, and the total amount due is recorded in Accounts Receivable.
7. When an interest-bearing note is given to a bank when taking out a loan, the difference

between the cash proceeds and the maturity amount is debited to Discount on Notes Payable.