QUIZBOWL

Accounts Receivable

Mechanics:

I. All participants shall provide their own calculator, pencil/pen, and scratch paper. Each
group will be given cut-out letter answers– A, B, C and D.

II. There will be a total of fifteen (15) multiple choice questions. Each question is worth two
(2) points.

III. The groups will be given a copy for every question and can start solving once they have
received a copy. The quiz master shall read the question only once.

IV. Everyone will be given ninety seconds to answer each question. Failure to raise the
answer after the given time shall be disqualified.

V. TWIST: There will be a GOLDEN QUESTION after the 5th, 10th, and 15th question. Each
golden question is worth 3 GOLDEN POINTS.

1st. Each group shall choose a representative.

2nd. The quiz master will give a riddle or question to be answered.
3rd. When the representatives have an answer to the riddle or question, they shall run
towards the quiz master and whisper the answer.
4th. The quiz master shall grant the golden question to the representatives who gave
the correct answer.
5th. The representatives shall go back to their groups. The group shall work together
to answer the golden question.

NOTE: The first group that raises their right hands and gives the CORRECT ANSWER to
the GOLDEN QUESTION will get the 3 GOLDEN POINTS.

1.
The accounts receivable of NGANUNIPROCEEDMANKO COMPANY were stated at P1,467,000
in a balance sheet submitted to a banker for credit. You are called upon to audit the report
and, upon analysis, the asset was found to consist of the following items:

Due from customers on open account P 1,125,000

Acknowledged claim for damages 22,500
Due from consignee at billed price – cost price
being P22,500 30,000
Investment in and advances to affiliated company 150,000
Loans to officers and employees 13,500
Deposits with municipalities – bids for contracts 67,500
Unpaid capital stock subscriptions 60,000
Advances to creditors for merchandise purchased
but not received 24,000
Cash advanced to salesmen for traveling expenses 4,500
Allowance for doubtful accounts ( 30,000)
P1,467,000
The amount of P1,125,000 due from customers was the remaining balance after deducting
accounts with credit balances of P6,000.

During your examination, you noted that on December 31, the company assigned P300,000
of customers’ accounts to secure a 17%, P240,000 note payable. A 1% commission based on
the accounts assigned was charged and deducted from the cash received. The client recorded
this transaction by a debit to cash and a credit to notes payable.

How much is the Accounts Receivable (gross) balance at December 31?

a. P 759,000
b. P 789,000
c. P 1,101,000
d. P 1,131,000

ANSWER: D

(1) Claims Receivable 22,500

Accounts receivable 22,500
(2) Sales 30,000
Accounts receivable 30,000
(3) Advances to affiliates 150,000
Accounts receivable 150,000
(4) Receivables - officers/employee 13,500
Accounts receivable 13,500
(5) Deposits for contracts bidding 67,500
Accounts receivable 67,500
(6) Subscription receivable 60,000
Accounts receivable 60,000
(7) Advances to suppliers 24,000
Accounts receivable 24,000
(8) Advances to officers/employee 4,500
Accounts receivable 4,500
(9) Accounts receivable 30,000
Allowance for bad debts 30,000
(10) Accounts receivable 6,000
Customers with credit balance 6,000
(11)
OE: Cash 237,000
Notes payable 237,000
CE: Cash 237,000
Commission expense 3,000
Notes payable 300,000
Adj: Commission expense 3,000
Notes payable 3,000

Unadjusted AR 1,467,000
(1) ( 22,500)
(2) ( 30,000)
(3) ( 150,000)
(4) ( 13,500)
(5) ( 67,500)
(6) ( 60,000)
(7) ( 24,000)
(8) ( 4,500)
(9) 30,000
(10) 6,000
Adjusted balance 1,131,000
2.
An analysis and aging of CAUSEGIRLSLIKEYOURUN COMPANY accounts receivable at
December 31, 2006, disclosed the following:

Amounts estimated to be uncollectible P 1,800,000

Accounts receivable 17,500,000
Allowance for doubtful accounts (per books) 1,250,000

What is the net realizable value of CAUSEGIRLSLIKEYOURUN COMPANY’ receivables at

December 31, 2006?

a. P 15,700,000
b. P 17,500,000
c. P 16,250,000
d. P 14,450,000

ANSWER: A

Accounts receivable P17,500,000

Amount estimated to be uncollectible (1,800,000)
Net realizable value P15,700,000

3.
The following selected transactions occurred during the year ended December 31, 2016 of
KAYAPABES COMPANY:

Gross sales (cash and credit) P 900,736.80

Collections from credit customers, net of 2% cash discount 294,000.00
Cash sales 180,000.00
Uncollectible accounts written off 19,200.00
Credit memos issued to credit customers for sales ret./allow. 10,080.00
Cash refunds given to cash customers for sales ret./allow. 15,168.00
Recoveries on accounts receivable written-off in prior years
(not included in cash received stated above) 6,505.20

At year-end, the company provides for estimated bad debts losses by crediting the Allowance
for Bad Debts account for 2% of its net credit sales for the year. The allowance for bad debts
at the beginning of the year is P19,327.20.

The Bad Debts Expense of KAYAPABES at December 31, 2016 is:

a. P 20,725.54
b. P 14,093.14
c. P 8,030.74
d. P 7,829.14

ANSWER: B
Net credit sales:
Credit sales 720,736.80
- Sales discounts from credit sales ( 6,000.00)
- Sales returns from credit sales (10,080.00)
Net credit sales 704,656.80

Bad debts:
Net credit sales 704,656.80
x % of uncollectible 2%
Bad debts 14,093.136

4.
Presented below are unaudited balances of selected accounts of
TWOLESSLONELYPEOPLEINTHEWORLD COMPANY as of December 31, 2017:

Unaudited Balances, 12/31/17

Selected Accounts Debit Credit
Cash P 500,000
Accounts receivable 1,300,000
Allowance for doubtful accounts 8,000
Net sales P 6,750,000

Additional information are as follows:

a. Goods amounting to P50,000 were invoiced for the accounts of TILAIBONKUNGLUMIPAD

STORE & COMPANY, recorded on January 2, 2018 with terms of net, 60 days, FOB shipping
point. The goods were shipped to TILAIBONKUNGLUMIPAD on December 30, 2017.

b. The bank returned on December 29, 2017, a customer’s check for P5,000 marked “DAIF”,
but no entry was made.

c. TWOLESSLONELYPEOPLEINTHEWORLD estimates that allowance for uncollectible

accounts should be one and one-half percent (1½%) of the accounts receivable balance
as of year-end. No provision has yet been made for 2017.

What is the adjusted amount of 2017 Bad Debts Expense?

a. P 12,325
b. P 20,325
c. P 28,325
d. P 36,325

ANSWER: C

1,300,000 + 50,000 + 5,000 = P 1,355,000

P1,355,000 x 1 ½% = P 20,325

P20,325 + P8,000 debit balance = P 28,325

5.
WHENISEEYOURSMILE COMPANY provided the following information to accounts receivable
for 2014:

Accounts receivable on January 1 P 1,300,000

Credit sales 5,400,000
Collections from customers, excluding recovery 4,750,000
Accounts written off 125,000
Collections of accounts written off in prior year
(customer credit was not reestablished) 25,000
Estimated uncollectible receivables per aging
of receivables at December 31 165,000

On December 31, 2014, what is the balance of accounts receivable, before allowance for
doubtful accounts?

a. P 1,825,000
b. P 1,850,000
c. P 1,950,000
d. P 1,990,000

ANSWER: A

Accounts receivable – January 1 P 1,300,000

Add: Credit sales 5,400,000
Total P 6,700,000
Less: Collection from customers P 4,750,000
Accounts written off 125,000 4,875,000
Accounts receivable – December 31 P 1,825,000

6.
On December 31, 2014, SAKTONAPLEASEDLINAKAYA Company revealed a balance of P
8,200,000 in the accounts receivable control account. An analysis of the accounts receivable
showed the following:

Accounts known to be worthless P 100,000

Advance payments to creditors on purchase orders 400,000
Advances to affiliated companies 1,000,000
Customers’ accounts reporting credit balances arising
From sales returns (600,000)
Interest receivable on bonds 400,000
Trade accounts receivable – unassigned 2,000,000
Subscription receivable due in 30 days 2,200,000
Trade accounts receivable – assigned (Finance
Company’s equity in assigned accounts is P 500,000) 1,500,000
Trade installments receivable due 1-18 months,
Including unearned finance charge of P 50,000 850,000
Trade accounts receivable from officers, due currently 150,000
Trade accounts on which postdated checks are held
(no entries were made on receipt of checks) 200,000
Total 8,200,000

What amount should be reported as trade accounts receivable on December 31, 2014?
 a. P 4,650,000
b. P 4,700,000
c. P 4,150,000
d. P 4,050,000

ANSWER: A

Accounts receivable – unassigned P 2,000,000

Accounts receivable – assigned 1,500,000
Trade installments receivable (850,000 – 50,000) 800,000
Accounts receivable from officers 150,000
Accounts on which postdated checks are held 200,000
Total trade accounts receivable P 4,650,000

7.
At year-end, JUSTASMALLTOWNGIRLLIVING COMPANY reported net sales of P 7,100,000 and
allowance for doubtful accounts with debit balance of P 16,000 before adjustment. The entity
estimated the uncollectible accounts receivable at 2% of net sales.

What is the allowance for doubtful accounts at year-end?

a. P 158,000
b. P 144,000
c. P 142,000
d. P 126,000

ANSWER: D

Allowance for doubtful accounts(debit balances) (P 16,000)

Doubtful accounts expenses (7,100,000 x 2%) 142,000
Allowance for doubtful accounts, December 31 P 126,000

8.
During December, 2017, the Accounts Receivable controlling account on the books of
LAGINALANGUMUULANPARANGWALANG COMPANY showed one debit posting and two credit
postings. The debit represents receivables from December sales, P780,000. One credit was
for P470,400, made a result of cash collections on November and December receivables; the
second credit was an adjustment for estimated uncollectibles, P90,000. The December 31
balance was P270,000.

When receivables were collected, the bookkeeper credited Accounts Receivables for the cash
collected. All customers who paid their accounts during December took advantage of the 2%
cash discount.

As of December 1, debit balance in customers’ subsidiary accounts totaled P177,000. An

adjustment for estimated doubtful accounts of P18,000 had been posted to the Accounts
Receivable controlling account at the end of 2013, and no write-offs were recorded during
2017. In addition, a number of customers had overpaid their accounts, and as a result, some
of the customers’ subsidiary accounts had credit balances on December 1. No overpayments
were made during December nor were any credit balances in customers’ accounts reduced
during December.

The accounts Receivable beginning balance (unadjusted) of

LAGINALANGUMUULANPARANGWALANG COMPANY at December 31, 2017 is:

a. P 50,400
b. P 68,400
c. P 252,000
d. P 270,000

ANSWER: A

Computation for unadjusted AR beginning balance:

Accounts Receivable
* Beg. bal. 50,400 Collections 470,400
Sales 780,000 Allow. for BD 90,000
830,400 560,400
End bal. 270,000
* squeezed figure

9.
Your audit of SOMEBODYSAIDYOUGOT COMPANY for the year ended December 31, 2006
revealed that the Accounts Receivable account consists of the following:
Trade accounts receivable (current) P3,440,000
Past due trade accounts 640,000
Uncollectible accounts 128,000
Credit balances in customers’ accounts (80,000)
Notes receivable dishonored 240,000
Consignment shipments – at cost
The consignee sold goods costing P96,000 for P160,000. A 10% commission
was charged by the consignee and remitted the balance to
SOMEBODYSAIDYOUGOT COMPANY. The cash was received in January, 2007.
320,000
Total P4,688,000

The balance of the allowance for doubtful accounts before audit adjustment is a credit of
P80,000. It is estimated that an allowance should be maintained to equal 5% of trade
receivables, net of amount due from the consignee who is bonded. The company has not
provided yet for the 2006 bad debt expense.

Based on the above and the result of your audit, what is the adjusted balance of Allowance
for doubtful accounts?

a. P 204,000
b. P 216,000
c. P 172,000
d. P 179,200

ANSWER: B
 Trade receivables (current) P 3,440,000
Past due trade accounts 640,000
Notes receivable dishonored 240,000
Consignment goods already sold (160,000 x 90%) 144,000
Adjusted trade receivables P 4,464,000
Less due from consignee 144,000
Basis of allowance for doubtful accounts P 4,320,000
Bad debt rate 5%
Required allowance for doubtful accounts P 216,000

10.
You have been assigned to audit the financial statement of
WHENIGETOLDERIWILLBESTRONGER COMPANY. The company is a distributor of a variety of
electronic appliances and parts. The company uses the calendar year for reporting purposes.
Information regarding balances of WHENIGETOLDERIWILLBESTRONGER COMPANY Accounts
Receivable and the related Allowance for Doubtful Accounts as of December 31, 2006 and the
related audit finding, is given below.

The schedule of accounts receivable furnished you by the accountant reflects some errors.
The total figure in the schedule does not tally with the balance per subsidiary ledger of
P919,000. Based on your review of sales invoices, purchase orders and other related
documents, you noted the following information:

1. Sales on account of various electronics totaling P36,480 were returned by the customer
on December 28, 2006, but no entry was made in the books. The goods were included
in the year-end physical count.

2. Based on the findings per confirmation reply from a customer, he indicated that he
has already paid his account of P23,980 in October, 2006. Your verification disclosed
that said collection was credited to net sales account.

3. Collection of P12,950 on November 5, 2006 from Diana Corporation was credited to

the account of DNA Corporation.

The allowance for doubtful accounts is set at 3% of the outstanding accounts receivable at
the end of the period. As of December 31, 2006, the Allowance for Doubtful Accounts has a
balance of P32,400 before adjustment.

What is the adjusted balance of Accounts Receivables as of December 31, 2006?

a. P 919,000
b. P 895,020
c. P 882,520
d. P 858,540

ANSWER: D

Sales 36,480
Accounts receivable 36,480
Sales 23,980
Accounts receivable 23,980

P 919,000 – P 36, 480 – P 23,980 = P 858,540

11.
At the end of its first year of operations, December 31, 2006,
NISOLVENASAYUPNAKATONSAYUPGHAPON COMPANY reported the following information:
Accounts receivable, net of allowance for doubtful accounts P9,500,000
Customer accounts written off as uncollectible during 2006 240,000
Bad debts expense for 2006 840,000

What should be the balance in accounts receivable at December 31, 2006, before subtracting
the allowance for doubtful accounts?

a. P 10,100,000
b. P 10,340,000
c. P 9,740,000
d. P 10,580,000

ANSWER: A

Bad debt expense for 2006 P840,000

Customer accounts written off as uncollectible
during 2006 (240,000)
Allowance for doubtful accounts, 12/31/06 P600,000

Accounts receivable, net of allowance for doubtful accounts

P 9,500,000
Allowance for doubtful accounts, 12/31/06 600,000
Accounts receivable, before deducting allowance for
doubtful accounts P10,100,000

12.
You were able to obtain the following information from your audit of
DILINAJUDKUMUUSABKAUSANALANG COMPANY’s Accounts Receivable and Allowance for
Doubtful Accounts:

• From the general ledger you noted that the Accounts Receivable has a balance of P848,000
as of December 31, 2006. Below is a transcript of the Allowance for Doubtful Accounts:

Debit Credit Balance

January 1 – Balance P20,000
July 31 – Write-off P16,000 4,000
December 31- Provision P48,000 P52,000

• The summary of the subsidiary ledger as of December 31, 2006 was totaled as follows:

Debit balances:
Under one month P360,000
One to six months 368,000
Over six months 152,000
P880,000
 Credit balances:
Alien P 8,000 - OK; additional billing in January, 2006
T. Twister 14,000 - Should have been credited to Apol*
Dee Lah 18,000 - Advances on sales contract
P 40,000

*Account is one to six months classification

The customers’ ledger is not in agreement with the accounts receivable control. The client
requested you to adjust the control account to the subsidiary ledger after corrections are
made.

• It is agreed that 1 percent is adequate for accounts under one month. Accounts one to
six months are expected to require a reserve of 2 percent. Accounts over six months are
analyzed as follows:

Definitely bad P 48,000

Doubtful (estimated to be 50% collectible) 24,000
Apparently good, but slow (estimated to be 90% collectible) 80,000
Total P152,000

How much is the adjusted balance of the Allowance for Doubtful Accounts as of December 31,
2006?

a. P 30,680
b. P 31,240
c. P 30,960
d. P 30,760

ANSWER: A

SL
GL Debit Credit 0 to 1 1 to 6 Over 6
Unadjusted balances 848,000 880,000 40,000 360,000 368,000 152,000
Add (deduct):
Accounts w/ credit
balances 26,000 (14,000) (40,000) (14,000)
Definitely uncollectible
accounts
(48,000) (48,000) (48,000)
Unlocated difference
(8,000)
Adjusted balances 818,000 818,000 0 360,000 354,000 104,000

Account Adjusted Required

classification balance Rate Allowance
0 to 1 month P360,000 1% P 3,600
1 to 6 months 354,000 2% 7,080
Over 6 months 104,000 P24,000 – 50% 12,000
P80,000 – 10% 8,000
P30,680
13.
GIKAPOINAKOPEROSOLVEGIHAPON COMPANY provides for doubtful accounts based on 3%
of credit sales. The following data are available for 2010.

Credit Sales during 2010 P21,000,000

Allowance for doubtful accounts 1/1/10 170,000
Collection of accounts written off in prior years
(Customer credit was reestablished) 80,000
Customer accounts written off as uncollectible during 2010 300,000

What is the balance in allowance for doubtful accounts at December 31, 2010?

a. P 630,000
b. P 420,000
c. P 500,000
d. P 580,000

ANSWER: D
Allowance for doubtful accounts 1/1/10 P 170,000
Establishment of accounts written off in prior years 80,000
Customer account written off in 2010 (300,000)
Bad debt expense for 2010 (P21,000,000 X 3%) 630,000
Allowance for doubtful accounts 12/31/10 P 580,000

14.
In your audit of IAMBULLETPROOFNOTHING COMPANY, you noted that the company’s balance
sheet shows the accounts receivable balance at December 31, 2005 as follows:

Accounts receivable P3,600,000

Allowance for doubtful 72,000
accounts
P3,528,000

During 2006, transactions relating to the accounts were as follows:

• Sales on account, P38,400,000.

• Cash received from collection of current receivable totaled P31,360,000, after discount of
P640,000 were allowed for prompt payment.
• Customers’ accounts of P160,000 were ascertained to be worthless and were written off.
• Bad accounts previously written off prior to 2005 amounting to P40,000 were recovered.
• The company decided to provide P184,000 for doubtful accounts by journal entry at the
end of the year.
• Accounts receivable of P5,600,000 have been pledged to a local bank on a loan of
P3,200,000. Collections of P1,200,000 were made on these receivables (not included in
the collections previously given) and applied as partial payment to the loan.

Based on the above and the result of your audit, the accounts receivable as of December 31,
2006 is

a. P 8,680,000
b. P 9,840,000
c. P 4,240,000
d. p 8,640,000
ANSWER: D

Accounts receivable, 12/31/05 P 3,600,000

Add: Sales on account 38,400,000
Bad debt recoveries 40,000
Total 42,040,000
Less: Current receivables collected, before
cash discounts
(P31,360,000 + P640,000) P32,000,000
Accounts written off 160,000
Bad debt recoveries 40,000
Collections made on AR pledged as
collateral 1,200,000 33,400,000
Accounts receivable, 12/31/06 P 8,640,000

15.
The following accounts were taken from LASTNUMBERNAJUD COMPANY’s balance sheet at
December 31, 2016.
Debit Credit
Accounts receivable P4,100,000
Allowance for doubtful accounts 100,000
Net credit sales P7,500,000

If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be
reported for 2016.

a. P 123,000
b. P 23,000
c. P 223,000
d. P 225,000

ANSWER: C

Accounts receivable P4,100,000

Percentage 3%
Bad debt expense, before adjustment 123,000
Allowance for doubtful accounts (debit balance) 100,000
Bad debt expense for 2016 P 223,000
Golden Questions (bonus)

1.
Your audit disclosed that on December 31, 2006, the accounts receivable control account of
UNSAMANINGGOLDENQUESTIONMURAGGOLDENBUZZER COMPANY had a balance of P2,865,000.
An analysis of the accounts receivable account showed the following:
Accounts known to be worthless P 37,500
Advance payments to creditors on purchase orders 150,000
Advances to affiliated companies 375,000
Customers’ accounts reporting credit balances arising from sales return
(225,000)
Interest receivable on bonds 150,000
Other trade accounts receivable – unassigned 750,000
Subscriptions receivable for common stock due in 30 days 825,000
Trade accounts receivable - assigned (Finance company’s equity in assigned
accounts is P150,000) 375,000
Trade installment receivable due 1 – 18 months, including unearned finance
charges of P30,000 330,000
Trade receivables from officers due currently 22,500
Trade accounts on which post-dated checks are held (no entries were made on
receipts of checks) 75,000
P2,865,000

The trade accounts receivable as of December 31, 2006 is

a. P 1,147,500
b. P 1,522,500
c. P 1,485,000
d. P 1,447,500

ANSWER: B

Other trade accounts receivable – unassigned P 750,000

Trade accounts receivable - assigned 375,000
Trade installment receivable due 1 – 18 months, net of
unearned finance charges of P30,000 300,000
Trade receivables from officers due currently 22,500
Trade accounts on which post-dated checks are held 75,000
Trade accounts receivable P1,522,500

2.
THEREGOESMYHEARTBEATING COMPANY’s unadjusted trial balance at December 31, 2006,
included the following accounts:
Debit Credit
Accounts receivable P1,000,000
Allowance for doubtful accounts 40,000
Sales P15,000,000
Sales returns and allowances 700,000

THEREGOESMYHEARTBEATING COMPANY estimates its bad debt expense to be 1 1/2% of net

sales. Determine its bad debt expense for 2006.
 a. P 225,000
b. P 254,500
c. P 214,500
d. P 55,000

ANSWER: C

Sales P15,000,000
Less sales returns and allowances 700,000
Net sales 14,300,000
Multiply by bad debt rate 1 1/2%
Bad debt expense P 214,500

3.
MANANAJUDHAYSALAMAT COMPANY provides for doubtful accounts based 3% of credit sales.
The following data are available for 2006.

Credit sales during 2006 P21,000,000

Allowance for doubtful accounts 1/1/06 170,000
Collection of accounts written off in prior years (Customer credit
was reestablished) 80,000
Customer accounts written off as uncollectible during 2006 300,000

What is the balance in allowance for doubtful accounts at December 31, 2006?

a. P 630,000
b. P 420,000
c. P 500,000
d. P 580,000

ANSWER: D

Allowance for doubtful accounts 1/1/06 P170,000

Establishment of accounts written off in prior years 80,000
Customer accounts written off in 2006 (300,000)
Bad debt expense for 2006 (P21,000,000 X 3%) 630,000
Allowance for doubtful accounts 12/31/06 P580,000