Question

11. The two methods of accounting for uncollectible receivables are the allowance method and the a. direct write-off method b. interest method c. wawilinmethod d. cost method 12. 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 net credit sales. If net credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is a. $34,500 b. $29,500 C $32,000 d. cannot be determined 13. What entry is required in the company's accounts to record outstanding checks? a. debit Cash; credit Accounts Payable b. debit Accounts Receivable; credit Cash c. debit Cash; credit Accounts Receivable d. none

Answer 1

Answer 11. Option A is correct i.e direct write off method.

Answer 12. 800000 * 4 % = $ 32000 Option C is correct.

In percentage of sales method , balance of allowance for doubtful debts account is not considered.

Answer 13. Option D is correct i.e none since it will get auto recorded in the bank statement with the passage of time. No need to record it in company's account.