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Q: The management determined that the amount due from a customer, MYTOM Limited, $50,000 is uncollectible as the company has closed down.
Is it allowance for doubtful
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- On January 24, 20Y8, Niche Consulting collected $5,700 it had hilled its clients for services rendered on December 31, 20Y7. How would you record the January 24 transaction, using the accrual basis? A. Increase Cash, $5,700; decrease Fees Earned, $5,700 B. Increase Accounts Receivable, $5,700; increase Fees Earned, $5,700 C. Increase Cash, $5,700; decrease Accounts Receivable, $5,700 D. Increase Cash, $5,700; increase Fees Earned, $5,700Assume a company has a $350 credit (not cash) sale. How would the transaction appear if the business uses accrual accounting? A. $350 would show up on the balance sheet as a sale. B. $350 would show up on the income statement as a sale. C. $350 would show up on the statement of cash flows as a cash outflow. D. The transaction would not be reported because the cash was not exchanged.A company is in its first year of operations and has never written off any accounts receivable as uncollectible. When the allowance method of recognizing bad debt expense is used, the entry to recognize that expense: a. increases net income b. decreases current assets c. has no effect on current assets d. has no effect on net income
- Aron Larson is a customer of Bank Enterprises. Mr. Larson took out a loan in the amount of $120,000 on August 1. On December 31, Bank Enterprises determines the loan to be uncollectible. Larson had not paid anything toward the balance due on account. What is the journal entry recording the bad debt write-off?A business makes a provision of RM3,000, which was 2% of all his trade receivables, and a further expected loss of RM1,200, the total amount owed by one of its customers, Franklin, who had been declared bankrupt. Required: a. Determine the amount of general and specific provision for doubtful debts. b. Prepare Journal Entries for the above transactions. Narratives are required.Africa Traders, on 28 February 2020, received a cash amount of R1 560 from Mr. A South, a trade receivable whose account was previously written off as irrecoverable by Africa Traders as Mr. A South was previously declared insolvent. Africa Traders is not a registered VAT vendor. What will the effect be of the above transaction in the accounting equation of Africa Traders? Select one: a. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Credit loss recovered - R1 560 - R1 560 R0 b. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Trade receivables R0 + R1 560 - R1 560 R0 c. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Bank Credit loss recovered + R1 560 + R1 560 R0 d. ACCOUNT DEBITED ACCOUNT CREDITED EQUITY = ASSETS - LIABILITIES Credit loss recovered Bank + R1 560 - R1 560 R0
- 2) Prepare the journal entry under the direct write-off method that ABC company would record when it determines that $500 cannot be collected from its customer DEF from a previous sale on account: DR: Bad Debt Expense $500 CR: Accounts Receivable $500 3) After being written off inn question 2, DEF company winds up partially paying ABC $250 that it previously owed, before officially going out of business. Please prepare the necessary journal entries to reverse the write off for the appropriate amount, and to record the receipt of cash: DR: CR: DR: CR: PLEASE DO NOT ANSWER THE FIRST QUESTION. KIND THANKSRM1. During March, Company A wrote off a $15,000 account receivable because a customer went bankrupt (assume the company uses the GAAP-required method). This will: Group of answer choices a) Increase bad debt expense b) Reduce the net realizable value of accounts receivable c) Reduce accounts receivable d)Increase the allowance for doubtful accounts e)Reduce net income for the year1. Bad debts are recognized on both accrual and cash basis of accounting. True of False?2. Adjusting entry is required to comply with the generally accepted accounting principles regarding revenue recognition and matching principle. True or false?3. The company uses asset method to record payment for annual insurance amounting to P12,000.00. On February 1, 2021, the bookkeeper entered it in the books as (DR) Insurance Expense and (CR) Cash. a. Transposition b. Transplacement c. No error d. Error of Omission e. Error of account titles
- Please answer the following 3 questions: 1) Lail Inc. accounts for bad debts using the allowance method. On June 1. Lail Inc. wrote off Andrew Green's $2,500 account. Based on Lail's estimation, Andrew Green will never pay any portion of the balance in his account. What effect will this write-off have on Lail Inc!'s balance sheet at the time of the write-off? A) None of the above. B) A decrease to assets and a decrease to stockholders' equity C) An increase to assets and an increase to stockholders' equity. D) An increase to stockholders' equity and a decrease to liabilities. 2) In a perpetual inventory system, the purchase of inventory is debited to: A) Cost of Goods Sold. B) Purchases. C) Inventory. D) Accounts Payable. 3. Under the allowance method, which of the following does not change the balance in the Accounts Receivable account? A) Collections on customer accounts. B) Write-offs. C) Returns on credit sales. D) Bad debt expense adjustment.At 30 June 20X6 a business had a provision for doubtful debts of £37600. At 30 June 20X7 it was decided to write-off £21900 as bad debts and that a specific provision for doubtful debts of £45300 was required. What is the total expense for bad and doubtful debts which will appear in the business's income statement for the year ended 30 June 20X7?On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets? Mutiple Choice Decrease in net income; no effect on total assets. No effect on net income; no effect on total assets. Decrease in net income; decrease in total assets. Increase in net income; no effect on total assets. No effect on net income; decrease in total assets
