Alton Company uses the allowance method to account for uncollectible receivables. The company has decided that a debtor's account is uncollectible. Alpha Company should: Debit Bad Debt Expense; credit Accounts Receivable. Debit Allowance for Doubtful Debts; credit Accounts Receivable. None of the listed choices. Debit Bad debt expense; credit Allowance for Doubtful Debts.

Alton Company uses the allowance method to account for uncollectible receivables. The company has decided that a debtor's account is uncollectible. Alpha Company should: Debit Bad Debt Expense; credit Accounts Receivable. Debit Allowance for Doubtful Debts; credit Accounts Receivable. None of the listed choices. Debit Bad debt expense; credit Allowance for Doubtful Debts.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 3C: Bad Debt Expense When a company has a policy of making sales for which credit is extended, it is...

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Bad Debt Expense When a company has a policy of making sales for which credit is extended, it is reasonable to expect a portion of those sales to be uncollectible. As a result, a company must recognize bad debt expense. The two methods of recognizing bad debt expense are the (1) direct write-off method and (2) allowance method. Required: 1. Describe fully both the direct write-off method and the allowance method of recognizing bad debt expense. 2. Explain the reasons why one of these methods is preferable to the other and the reasons why the other method is not usually in accordance with generally accepted accounting principles.
8) The Allowance Method for bad debts:A) Should be used if uncollectible accounts have a material effect on the company's financial statements used by investors and creditorsB) Complies with GAAPC) Estimates bad debt expense and establishes an allowance or reserve for uncollectibleD) All of the choices are correct Group of answer choices A B C D
1. Which of the following accounts is used only with the allowance method of accounting for uncollectible accounts receivable? Accounts Receivable Bad Debt Expense Allowance for Doubtful Accounts Cash 2. Which method of accounting for uncollectible accounts receivable uses an estimate based on a percent of sales? Direct write-off method Allowance method Both the direct write-off and allowance methods None of these choices are correct.
Question 9 Concord Company provides for bad debt expense at the rate of 3% of accounts receivable. The following data are available for 2018: Allowance for doubtful accounts, 1/1/18 (Cr.) $ 11300 Accounts written off as uncollectible during 2018 10400 Ending accounts receivable 1204000 The Allowance for Doubtful Accounts balance at December 31, 2018, should be $37020. $900. $36120. $35220.
14. Record the write-off. Choose * Account Payable * Allowance for Uncollectible Accounts * Sales Returns and Allowanced * Bad debt expense * Cash * Accounts Receivable
Neville accounts for bad debt using the direct method. Receivables from Draco Industries were determined to be uncollectible on 3/1/20. On 7/1/20, partial payment was received. The following entry is required on 7/1/20 a. Debt to Bad Debt Expense b. Credit to Allowance for Doubtful Accounts c. Debit to Accounts Receivable d. Debit to Allowance for Doubtful Accounts
Part (a) Debit allowance for doubtful accounts $16,508 credit Bad Debt expense $16,508.
1.(TCO 6) Under the allowance method for estimating uncollectible accounts, the entry to record the estimated bad debts: increases total assets.reduces net income.has no effect on total assets or net income.increases net income and decreases total assets. 2.(TCO 6) Net accounts receivable is calculated as: sales less sales returns and allowances.accounts receivable plus allowance for uncollectible accounts.accounts receivable less allowance for uncollectible accounts.accounts payable plus allowance for uncollectible accounts. 3.(TCO 7) If a company is using a perpetual inventory system, the balance in its inventory account three-quarters of the way through an accounting period would be equal to: the total of the beginning inventory plus goods purchased during the accounting periodthe amount of goods purchased during the periodthe inventory on hand at the beginning of the periodthe inventory on hand at the beginning of the period plus goods purchased…
Question 14 Santagos Industries gathered the following information from its accounting records for the year ended December 31, 2019, prior to adjustment: Net credit sales for the year $730,000 Accounts receivable balance, Dec. 31, 2019 145,000 Allowance for doubtful accounts balance, Dec. 31, 2019 1,850 Cr. Santagos uses the allowance method of accounting for uncollectible accounts and estimates bad-debt expense at 1.5% of net credit sales. Required: a) Prepare the adjusting entry to record bad-debt expense on December 31, 2019. b) Determine the balance in allowance for doubtful accounts after the adjusting entry is prepared. c) Show how the receivables would be reported on the December 31, 2019, balance sheet for Santagos Industries.
Statement 1: The direct write-off method of bad debts requires a journal entry when the receivables become doubtful of collection. Statement 2: An aging of accounts receivable uses the income statement approach in estimating bad debts expense. a. Only Statement 1 is trueb. Only Statement 2 is truec. Both Statement 1 and Statement 2 are trued. Both Statement 1 and Statement 2 are false Statement 1: When cash is received in lieu of stock dividends, there may be a gain on sale of the financial asset. Statement 2: When dividends were distributed using stocks from another corporation, it is appropriately called as a property dividend. a. Only Statement 1 is trueb. Only Statement 2 is truec. Both Statement 1 and Statement 2 are trued. Both Statement 1 and Statement 2 are false Statement 1: A share split increases the number, par value, and market value of the shares. Statement 2: From the point of view of the investor, the redemption of the shares is considered an impairment of the…