The expense recognitiona. requires that all credit losses be recorded when an individual customer cannot payb. necessitates the recording of an estimated amount for bad debts.c. results in the recording of a known amount for bad debt losses.d. is not involved in the decision of when to expense a credit loss

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Answered: The expense recognition a. requires…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 9MC: Which method delays recognition of bad debt until the specific customer accounts receivable is...

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Similar questions

Each time an account is written off under the direct write-off method, Bad Debt Expense is debited.
When an account is written off under the allowance method, there should be a debit to Bad Debt Expense.
Which account type is used to record bad debt estimation and is a contra account to Accounts Receivable?
When a company receives a deposit from a customer to protect itself against nonpayment for future services, the deposit should be classified by the company as: a. revenue b. a liability c. part of the allowance for doubtful accounts d. a deferred credit deducted from accounts receivable
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.
When using the allowance method for accounting for bad debts, accounts receivable is reported on the balance sheet at the expected net realizable value. When a particular receivable from a customer ultimately is determined to be uncollectible and is written off, the recording of this event will Group of answer choices A)decrease the net realizable value of the accounts receivable. B)have an effect that is not determinable from the information given. C)increase the net realizable value of the accounts receivable. D)decrease total current assets. e)None of the above
If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?a. It violates the matching principle. b. It will record bad debts only when an account is determined to be uncollectible. c. It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts. d. It will report accounts receivable in the balance sheet at their net realizable value.
Which of the followings concepts relates to using the allowances method in accounting for accounts receivable? A) Bad debt expense is an estimates that is based on historical and prospective information. B) Bad debt expense is based on the actual amounts determined to be uncollectible. C) Bads debt expense is an estimate that is based only on an analysis of the receivables aging. D) Bad debt expense is managments determination of which accounts will be sent to the attorney for collection.
Which among the statements is not correct? a. Net realizable value of accounts receivable results when accounts receivable is reduced by allowance for doubtful accounts b. Credit balances in accounts receivable arising from customer's advances should be excluded from accounts receivable c. The allowance method of recording bad debt loss is the one consistent with accrual accounting. d. answer not given
The estimate of a bad debt expense may be based on the historical relationship between actual bad debts incurred and Sales Accounts receivables a. Yes No b. Yes Yes c. No Yes d. No No
What is the normal journal entry for recording bad debt expense? Group of answer choices debit Accounts Receivable, credit Bad Debt Expense debit Bad Debt Expense, credit Allowance for Uncollectible Accounts debit Allowance for Uncollectible Accounts, credit Bad Debt Expense debit Bad Debt Expense, credit Accounts Receivable
When the allowance method of recognizing bad debt expense is used, the allowance for doubtful accounts would decrease when Account previously written off is collected Specific uncollectible account is written off Specific account receivable is collected Account previously written off becomes collectible

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