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- When a Liability is reduced or decreased, it is recorded on the? a. Right or debit side of the account b. Right or credit side of the account c. Left or debit side of the account d. Left or credit side of the accountEach time an account is written off under the direct write-off method, Bad Debt Expense is debited.FAST PLZ - Which of the following is a contra-liability account? a. Notes Payable b. Discount on Notes Payable c. Accumulated Amortization d. Taxes Payable
- Majestic company has a credit balance of the allowance for doubtful account that exceeds the amount of a bad debt being written off, the journal entry to record the write off results in: a. A reduction in current liabilities b. No effect on the bad debts expenses of the current period O C. An increase in current assets d. An increase in the expenses of the current periodWhen the allowance method of recognizing uncollectible accounts is used, the entry to record the write off of a specific account would A. decrease both accounts receivable and the allowance for uncollectible accounts B. decrease accounts receivable and increase the allowance for uncollectible accounts C. increases the allowance for uncollectible accounts and decrease net income D. decrease both accounts receivable and net incomeThe __________ method is based on the relationship of credit sales and matches current bad debt expense against current credit sales. a.direct write-off b.percent of outstanding accounts receivable c.percentage of credit sales d.aging of accounts receivable
- Under the allowance method for uncollectible receivables, the entry to record uncollectible-account expense has what effect on the financial statements?a. Decreases assets and has no effect on net incomeb. Increases expenses and increases stockholders’ equityc. Decreases net income and decreases assetsd. Decreases stockholders’ equity and increases liabilitiesIn terms of Business interruption insurance, the gross profit sum insured can be calculated on the following basis: 1 Net profit less standing charges. 2 Turnover plus closing stock, minus opening stock. 3 Net profit plus standing charges. 4 Turnover plus standing charges.Which one of the following statements concerning bad debt expenses is correct? Select one: a. When you write off an accounts receivable, you debit bad debt expense and credit accounts receivable. b. You record bad debt expense when individual accounts receivable becomes uncollectible. c. Under the percentage of receivables method, bad debt expense is the year-end receivables multiplied by the % of uncollectible accounts. d. When the allowance method is used, bad debt expense is recorded before the accounts are written off.
- Using the allowance method, the effect on the current year’s financial statements of writing off an account receivable generally is to a. Decrease total assets.b. Decrease net income.c. Both a. and b.d. Neither a. nor b.a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. c. Determine the net realizable value of accounts receivable.a)Present the journal entries for the transactions above. (b)Journalise the adjusting entry. Show workings. (c)Determine the net realizable value of the accounts receivable as at 31 Dec. (d)Is the Allowance Method of accounting for doubtful debt better compared to the direct write-off method? Explain.
