Forest Hill, Inc. repossessed an item it sold in 2014 with a gross profit of 40%. The fair value of the repossessed item was $140. The remaining receivable amounted to $400. What account had the smallest amount debited to it?
A) Allowance for Doubtful Installment Accounts Receivable
B) Accounts Receivable
C) Repossessed Inventory
D) Deferred Gross Profit

Question

Quizplus · Accepted Answer

The Allowance for Doubtful Installment Accounts Receivable would have the smallest amount debited because it is typically adjusted for estimated uncollectible amounts, which would be less than the fair value or the remaining receivable.