When the allowance method of recognizing bad debt expense is used, the allowance for doubtful accounts decrease when Specific account receivable is collected Account previously written off is collected Account previously written off becomes uncollectible Specific uncollectible account is written off

When the allowance method of recognizing bad debt expense is used, the allowance for doubtful accounts decrease when Specific account receivable is collected Account previously written off is collected Account previously written off becomes uncollectible Specific uncollectible account is written off

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

Which account type is used to record bad debt estimation and is a contra account to Accounts Receivable?
When an account is written off under the allowance method, there should be a debit to Bad Debt Expense.
Each time an account is written off under the direct write-off method, Bad Debt Expense is debited.
Which of the following estimation methods considers the amount of time past due when computing bad debt? A. balance sheet method B. direct write-off method C. income statement method D. balance sheet aging of receivables method
Discuss the differences between the allowance methods of recording bad debts and the direct write-off method.
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
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
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
If the provision for doubtful debt is increased, the accounting adjustment will be: Select one: a. Debit: Bad debt expense Credit: Trade receivables b. Debit: Bad debt expense Credit: Provision for bad debts c. Debit: Provision for bad debts Credit: Bad debt expense d. Debit: Trade receivables Credit: Bad debt expense
A disadvantage of basing bad debt expense on the historical relationship between actual bad debts and the outstanding accounts receivable balance at the end of the year is that A it is not a generally accepted accounting procedure. B it is an income statement approach. C it may not recognize the cause and effect relationship between expenses and revenues. D it may not result in a reasonable estimate of the net realizable value of receivables.
The allowance for doubtful is not: a. credited when bad debts expense is estimated and recorded b. a liability account c. used instead of reducing accounts receivable directly d. a contra asset account e. debited when uncollectible accounts are written off
When using the percentage of sales method to estimate the amount of bad debt expense for uncollectible accounts, what effect would a debit balance in Allowance for Doubtful Accounts have on the current period's adjusting entry? a.A debit balance would increase the amount of the current period's adjusting entry. b.A debit balance would decrease the amount of the current period's adjusting entry. c.The balance in Allowance for Doubtful Accounts would be ignored when making the current period's adjusting entry. d.A debit balance would be carried over to the next period.