Under the direct write-off method of uncollectible accounts, the effect on the accounting equation of writing off a customer's account is
a.an increase in liabilities and a decrease in stockholders' equity (expense)
b.an increase in assets and an increase in liabilities
c.a decrease in assets and a decrease in liabilities
d.a decrease in assets and a decrease in stockholders' equity (expense)
SOLUTION
answer is option d - decrease in assets and a decrease in stockholders equity (expense) .
Uncollectable account is an asset , Writting off will decrease in assets and as an expense it will decrease in stockholders equity .
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Under the direct write-off method of uncollectible accounts, the effect on the accounting equation of writing...
Uncollectible Accounts, Using Direct Write-Off Method
Illustrate the effects on the accounts and financial statements
of the following transactions in the accounts of Valley Care &
Supplies Co., a local hospital supply company that uses the direct
write-off method of accounting for uncollectible receivables:
If no account or activity is affected, select "No effect" from
the dropdown list and leave the corresponding number entry box
blank. Enter account decreases and cash outflows as negative
amounts.
March 18. Received $5,000 on...
Exercise 7-1A Analysis of financial statement effects of accounting for uncollectible accounts under the allowance method LO 7-1 Businesses using the allowance method for the recognition of uncollectible accounts expense commonly experience four accounting events: 1. Recognition of uncollectible accounts expense through a year-end adjusting entry. 2. Write-off of uncollectible accounts. 3. Recognition of revenue on account. 4. Collection of cash from accounts recevable. Required Show the effect of each event on the elements of the financial statements, using a...
Under the direct write-off method of accounting for uncollectible accounts, Bad Debt Expense is recorded a.when a credit sale is past due b.whenever a predetermined amount of credit sales has been made c.at the end of each accounting period d.when an account is determined to be worthless
. Under the direct write-off method of accounting for uncollectible accounts a. the allowance account is increased for the actual amount of bad debt at the b. a specific account receivable is decreased for the actual amount of bad debt at c. balance sheet relationships are emphasized. time of write-off the time of write-off. d. bad debt expense is always recorded in the period in which the revenue was recorded. Which of the following should not be included in the...
Which of the following is a correct statement? Multiple Choice Writing off an uncollectible account under the allowance method decreases net income. Writing off an uncollectible account under the direct write-off method does not affect net income. Estimating uncollectible accounts expense improves the matching of revenues and expenses. All of these are correct statements.
Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible receivables. Mar. 17: Received $2,630 from Matthew Chapman and wrote off the remainder owed of $4,790 as uncollectible. If an amount box does not require an entry, leave it blank. Mar. 17 Cash Bad Debt Expense Accounts Receivable-Matthew Chapman Feedback July 29: Reinstated the account of Matthew Chapman and received $4,790 cash in full payment. July 29 Accounts Receivable-Matthew Chapman Bad Debt Expense July...
What is the journal entry to write off a customer's account under the direct write-off method? O No entry is required. O Debit Cash; credit Accounts Receivable/customer name. Debit Bad Debt Expense; credit Allowance for Uncollectible Accounts Debit Bad Debt Expense; credit Accounts Receivable/customer name.
PRINTE Question 6 Under the allowance method for uncollectible accounts, allowance for doubtful accounts increases, while accounts receivables decrease when writing off an uncollectible account. O the entry to write off an uncollectible account only involves statement of financial position accounts. bad debt expense increases, while allowance for doubtful accounts decreases when writing off an uncollectible account. bad debts expense is not recorded until a customer defaults.
PRINTER Question 6 Under the allowance method for uncollectible accounts, allowance for doubtful accounts increases, while accounts receivables decrease when writing off an uncollectible account. the entry to write off an uncollectible account only involves statement of financial position accounts. bad debt expense increases, while allowance for doubtful accounts decreases when writing off an uncollectible account. KD bad debts expense is not recorded until a customer defaults.
Calculator Print Item Show Me How еВook Entries for uncollectible accounts, using direct write-off method Chart of Accounts Journal Instructions Instructions Sold merchandise on account to Dr. Kyle Norby, $17,190. The cost of the goods sold was $9,550 19 Jan. Received $5,500 from Dr. Kyle Norby and wrote off the remainder owed on the sale of January 19 as 2 June uncollectible. Reinstated the account of Dr. Kyle Norby that had been written off on June 2 and received $11,690...