Question 1

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment),and bad debt expense is estimated at 4% of credit sales.If net credit sales are $800,000,the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Accepted Answer

To find the estimated amount of uncollectible accounts, we need to multiply the net credit sales by the estimated percentage of bad debts:
$800,000 x 4% = $32,000

This is the amount that needs to be recorded as an adjusting entry to the Allowance for Doubtful Accounts. Since the account has a debit balance of $2,500, we need to credit it by $32,000 - $2,500 = $29,500. Therefore, the adjusting entry would be:

Debit Bad Debt Expense $32,000
Credit Allowance for Doubtful Accounts $29,500

The answer is C, $32,000.

Question 2

Allowance for Doubtful Accounts is classified as a(n)______ account and has a normal ______ balance. ​

Accepted Answer

Allowance for Doubtful Accounts is a contra asset account, meaning it offsets the balance of an asset account (Accounts Receivable), and it normally has a credit balance because it reduces the total amount of receivables reported on the balance sheet.

Question 3

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes ​a

Accepted Answer

The allowance method requires a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts when an account is written off as uncollectible. Option B (credit to Cash) and option C (debit to Accounts Receivable, James) are not correct because they do not accurately reflect the write-off transaction. Option D (credit to Bad Debt Expense) is also incorrect because the write-off would not result in a credit to the expense account. Therefore, the correct answer is A (debit to Allowance for Doubtful Accounts).

Question 4

A company uses the allowance method to account for uncollectible accounts receivable.When the firm writes off a specific customer's account receivable

Accepted Answer

When a company writes off a specific customer's account receivable under the allowance method, it does not affect total current assets or total expenses. This is because the allowance for doubtful accounts, a contra-asset account, had already been adjusted to reflect expected uncollectible accounts, impacting expenses at the time of adjustment, not at the write-off.

Question 5

Allowance for Doubtful Accounts has a debit balance of $2,300 at the end of the year (before adjustment).The company prepares an analysis of customers' accounts and estimates the amount of uncollectible accounts to be $31,900.Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?

Accepted Answer

DThe correct adjusting entry to record the Bad Debt Expense for the year is to debit Bad Debt Expense for $34,200 and credit Allowance for Doubtful Accounts for $34,200. This is because the desired ending balance in the Allowance for Doubtful Accounts is $31,900 (the estimated uncollectible amount), but there is already a $2,300 debit balance in the account. Therefore, to adjust the account to the desired credit balance, you need to add both the existing debit balance and the estimated uncollectible amount, which totals $34,200 ($31,900 + $2,300).

Question 6

Using the allowance method of accounting for uncollectible receivables,the entry to reinstate a specific receivable previously written off would include a

Accepted Answer

The allowance method of accounting for uncollectible receivables involves writing off bad debts by debiting Allowance for Doubtful Accounts and crediting Accounts Receivable. If a previously written-off receivable is later deemed collectible, it is reinstated by debiting Accounts Receivable and crediting Allowance for Doubtful Accounts. This means that the correct answer is D, as a debit to Accounts Receivable is required to reinstate the receivable.

Question 7

Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000.​ Which of the following is correct regarding the entry to record estimated uncollectible receivables?

Accepted Answer

The entry to record estimated uncollectible receivables using the percent of sales method involves crediting the Allowance for Doubtful Accounts account. This account is a contra asset account and represents the estimated amount of uncollectible accounts. It is used to reduce the Accounts Receivable account on the balance sheet. Therefore, choices A, B, and D are incorrect.

Question 8

In accounting for uncollectible receivables,the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

Accepted Answer

The answer of In accounting for uncollectible receivables,the balance in...

Question 9

Abbott Company uses the allowance method of accounting for uncollectible accounts.Abbott estimates that 3% of credit sales will be uncollectible.On January 1,the Allowance for Doubtful Accounts had a credit balance of $2,400.During the year,Abbott wrote off accounts receivable totaling $1,800 and made credit sales of $100,000.After the adjusting entry,the December 31 balance in Bad Debt Expense will be

Accepted Answer

Abbott estimates 3% of credit sales ($100,000) will be uncollectible, which equals $3,000. Bad Debt Expense is adjusted based on the estimated uncollectibles, not affected by the beginning balance in Allowance for Doubtful Accounts or the actual write-offs during the year.

Question 10

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment),and bad debt expense is estimated at 3% of credit sales.If credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivable is

Accepted Answer

Uncollectible accounts estimate = Credit sales × Bad debt as a percent of credit sales = $300,000 × 0.03 = $9,000

Question 11

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables,a major difference is that the direct write-off method

Accepted Answer

The direct write-off method is typically used by small companies with fewer receivables because it is simpler and does not require estimation of bad debts. The allowance method, which uses an allowance account and often estimates uncollectible accounts based on a percentage of sales or outstanding receivables, is more commonly used by larger companies with many receivables.

Question 12

​Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000.​ Which of the following is correct?

Accepted Answer

To estimate uncollectible expenses using the percent of sales method, we need to multiply the sales by the expected percentage of uncollectible accounts. Therefore, uncollectible accounts are estimated to be $111,000 (2% of $5,550,000). Choice A is incorrect because it only includes the percentage but does not apply it to the sales amount. Choice C is incorrect because it only estimates the bad debt expense for the period, not the total uncollectible accounts. Choice D is incorrect because it doubles the estimated uncollectible accounts.

Question 13

Under the allowance method of accounting for uncollectible receivables,writing off an uncollectible account

Accepted Answer

Writing off an uncollectible account under the allowance method affects only balance sheet accounts, specifically the accounts receivable and the allowance for doubtful accounts, without impacting the income statement. This is because the expense related to uncollectible accounts is recognized earlier when the allowance is estimated.

Question 14

Dalton Company uses the allowance method to account for uncollectible receivables.Dalton has determined that the Irish Company account is uncollectible.To write off this account,Dalton should debit

Accepted Answer

When using the allowance method, to write off an uncollectible account, you debit Allowance for Doubtful Accounts and credit Accounts Receivable. This action removes the receivable from the books and reduces the allowance account, without affecting the income statement at the time of the write-off.

Question 15

Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment),and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,000.Based on this estimate,which of the following adjusting entries should be made?

Accepted Answer

The correct adjusting entry is to debit Bad Debt Expense for $15,200 and credit Allowance for Doubtful Accounts for $15,200. This is because the desired balance in the Allowance for Doubtful Accounts is $16,000, and there is already a credit balance of $800. Therefore, an additional $15,200 is needed to adjust the balance to the desired $16,000.

Question 16

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Accepted Answer

Option B involves recording a specific bad debt expense for a specific customer, rather than using the allowance method. The other options involve entries specific to the allowance method of accounting for uncollectible receivables.

Question 17

At the beginning of the year,the balance in Allowance for Doubtful Accounts is a credit of $760.During the year,$120 of previously written off accounts are reinstated and accounts totaling $740 are written off as uncollectible.The end-of-year balance (before adjustment)in Allowance for Doubtful Accounts should be ​

Accepted Answer

The allowance for doubtful accounts is used to estimate the amount of accounts receivable that are likely to be uncollectible. To determine the end-of-year balance in the allowance for doubtful accounts, we need to consider the activity during the year.

First, $120 of previously written off accounts are reinstated. This means that the allowance needs to be reduced by $120 to reflect the fact that these accounts are no longer considered uncollectible.

Next, accounts totaling $740 are written off as uncollectible. This means that the allowance needs to be increased by $740 to reflect the fact that these accounts are now considered uncollectible.

So, the net change in the allowance for doubtful accounts is:

- $120 (reduction for reinstated accounts)
+ $740 (increase for new write-offs)
= $620

To get the end-of-year balance, we need to add this net change to the beginning balance of $760:

$760 (beginning balance)
+ $620 (net change)
= $1,380

However, the question asks for the end-of-year balance before adjustment. Since we haven't made the adjusting entry yet, the end-of-year balance before adjustment is simply the beginning balance:

$760

Therefore, the correct answer is C) $140.

Question 18

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment),and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000.Which of the following entries records the proper adjusting entry for bad debt expense?

Accepted Answer

The correct adjusting entry needs to increase the Allowance for Doubtful Accounts to the desired balance of $13,000. Since it currently has a debit balance of $600, we need to credit the account for $13,600 ($13,000 desired balance + $600 to offset the existing debit balance) and debit Bad Debt Expense for the same amount to record the expense.

Question 19

Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment).The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900.Which of the following adjusting entries would be made to record the Bad Debt Expense for the year?

Accepted Answer

The correct adjusting entry to record the Bad Debt Expense involves debiting Bad Debt Expense and crediting Allowance for Doubtful Accounts for the difference between the desired ending balance ($41,900) and the current balance ($1,300), which is $40,600 ($41,900 - $1,300).

Question 20

The allowance method of estimating uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivable are uncollectible.The Allowance for Doubtful Accounts has a debit balance of $110.The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:

Accepted Answer

The correct adjusting entry requires crediting the Allowance for Doubtful Accounts for the total desired balance ($640) plus the existing debit balance ($110), totaling $750. This ensures the allowance account reflects the correct estimated uncollectible amount.

Quiz 8: Receivables

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 4% of credit sales.If net credit sales are $800,000,the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Allowance for Doubtful Accounts is classified as a(n) account and has a normal balance.

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes a

A company uses the allowance method to account for uncollectible accounts receivable.When the firm writes off a specific customer's account receivable

Using the allowance method of accounting for uncollectible receivables,the entry to reinstate a specific receivable previously written off would include a

Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000. Which of the following is correct regarding the entry to record estimated uncollectible receivables?

In accounting for uncollectible receivables,the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 3% of credit sales.If credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivable is

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables,a major difference is that the direct write-off method

Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000. Which of the following is correct?

Under the allowance method of accounting for uncollectible receivables,writing off an uncollectible account

Dalton Company uses the allowance method to account for uncollectible receivables.Dalton has determined that the Irish Company account is uncollectible.To write off this account,Dalton should debit

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment) ,and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000.Which of the following entries records the proper adjusting entry for bad debt expense?

Quiz 8: Receivables

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 4% of credit sales.If net credit sales are $800,000,the amount of the adjusting entry to record the estimate of the uncollectible accounts is

Allowance for Doubtful Accounts is classified as a(n) ______ account and has a normal ______ balance. ​

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes ​a

A company uses the allowance method to account for uncollectible accounts receivable.When the firm writes off a specific customer's account receivable

Using the allowance method of accounting for uncollectible receivables,the entry to reinstate a specific receivable previously written off would include a

In accounting for uncollectible receivables,the balance in Allowance for Doubtful Accounts will directly impact the amount of the adjustment when applying which method?

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment) ,and bad debt expense is estimated at 3% of credit sales.If credit sales are $300,000,the amount of the adjusting entry to record the estimated uncollectible accounts receivable is

When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables,a major difference is that the direct write-off method

​Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000.​ Which of the following is correct?

Under the allowance method of accounting for uncollectible receivables,writing off an uncollectible account

Dalton Company uses the allowance method to account for uncollectible receivables.Dalton has determined that the Irish Company account is uncollectible.To write off this account,Dalton should debit

When a company uses the allowance method of accounting for uncollectible receivables,which entry would not be found in the general journal?

Allowance for Doubtful Accounts has a debit balance of $600 at the end of the year (before adjustment) ,and an analysis of accounts in the customers ledger indicates uncollectible receivables of $13,000.Which of the following entries records the proper adjusting entry for bad debt expense?

Allowance for Doubtful Accounts is classified as a(n) account and has a normal balance.

Miles uses the allowance method and wrote off the account of James.Miles then received $559 as partial payment on the account of James.The journal entry to record the initial write-off includes a

Jefferson uses the percent of sales method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000. Which of the following is correct?