Homework Answers
Solution:
The direct write off method of accounting for bad debts "does not require estimates of bad debt losses". Because this method write offs the uncollectible on actual basis.
Hence last option is correct.
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Kimmel, Accounting, 6e TIMER Multiple Choice Question 123 The direct write-off method of accounting for bad...
Bad Debt Practice Exercises 26. The percentage of receivables method for estimating uncollectible accounts focuses on...
Bad Debt Practice Exercises 26. The percentage of receivables method for estimating uncollectible accounts focuses on a net realizable value b. the relationship between accounts receivable and bad debts expense c. income statement relationships d. the relationship between sales and accounts receivable 27. Holman Company uses the percentage of credit sales method. Cash sales are $1,000,000 and credit sales are $4,000,000. Management estimates that 1% of sales will be bad. What adjusting entry will Homan Company make to record the...
Describe fully both the direct write-off method and the allowance method of recognizing bad debt expense,...
Describe fully both the direct write-off method and the allowance method of recognizing bad debt expense, discuss the reasons why one of the methods is preferable to the other and the reasons why the other method is not usually in accordance with generally accepted accounting principles.
7, and drag to the Favorites Bar folder. Or import from another browser. Import favorites Kimmel,...
7, and drag to the Favorites Bar folder. Or import from another browser. Import favorites Kimmel, Accounting, 6e Help 1 System Announcements CALCULATOR PRINTER VERSION BACK Brief Exercise 215 The ledger of the Ramirez Company at the end of the current year shows Accounts Receivable of $200,000. If Allowance for Doubtful Accounts has a credit balance of $3,000 in the trial balance and bad debts are expected to be 8% of accounts receivable, journalize the adjusting entry for end of...
Cite all sources. Please answer the following question(s): 1. Compare and contrast the direct w...
Cite all sources.
Please answer the following question(s):
1. Compare and contrast the direct write-off method and the
allowance method for bad debts.
2. Explain when the expense for uncollected accounting receivable
is recognized for each method. Why?
3. Why is the direct write-off method not considered to follow
generally accepted accounting principles (GAAP)?
4. Discuss the allowance method and the direct write-off method of
accounting for bad debts. When is the expense for uncollected
accounts receivable recognized under each...
If a company uses the allowance method of accounting for bad debts which one of the...
If a company uses the allowance method of accounting for bad
debts which one of the following is true? Violates the matching
principle it will record bad debt only when an account is
determined to be uncollectible
If a company uses the allowance method of accounting for bad debts, which one of the following statements is true? O A. It violates the matching principle O B. It will record bad debts only when an account is determined to be uncollectible...
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense....
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000...
Question 22 (10 points) This company uses the Direct Write Off Method for accounting for bad...
Question 22 (10 points) This company uses the Direct Write Off Method for accounting for bad debts: Prepare the following entries. Jan. 2nd - Wrote off $6,100 owed by Jim Jones who has filed bankruptcy May 7th - Wrote off $2,000 owed by Jane Lewis who has not made a payment in over a year Nov 3rd - Reinstated the account of Jane Lewis which was written off May. 7th and received $2,000 full payment Dec 5th - Received $700...
QS 7-4 Distinguishing between allowance method and direct write-off method LO P1, P2 Indicate whether each...
QS 7-4 Distinguishing between allowance method and direct write-off method LO P1, P2 Indicate whether each statement best describes the allowance method or the direct write-off method. List Method 1. Estimates bad debts expense related to the sales recorded in that period. 2. Matches the estimated loss from uncollectible accounts receivable against the sales they helped create. Usually does not best match sales and expenses because bad debts expense is not recorded until an account becomes uncollectible, which usually occurs...
When the direct write-off method is used: Multiple Choice 0 the estimated amount of bad debts...
When the direct write-off method is used: Multiple Choice 0 the estimated amount of bad debts is debited to Bad Debt Expense. 0 the estimated amount of bad debts is debited to Allowance for Doubtful Accounts the estimated amount of bad debts is debited to which account Accounts Receivable. 0 bad debts are not estimated 0 A company bought land and a building for $128,000. The building has a useful life of 20 years. Why should the company split the...
Multiple Choice Question 84 Vaughn Company uses the percentage ot receivables method for recording bad debt...
Multiple Choice Question 84 Vaughn Company uses the percentage ot receivables method for recording bad debt expense. The accounts receivable balance is 5599000 and credit sales are $2640000. Management estimates that 3% of accounts receivable will be uncollectible. What adjusting entry will Vaughn Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $5200 credit balance before adjustment? 0 Bad Debt Expense 17970 Accounts Receivable 17970 Bad Debt Expense 12770 Allowance for Doubtful Accounts 12770...
Bad Debt Practice Exercises 26. The percentage of receivables method for estimating uncollectible accounts focuses on a net realizable value b. the relationship between accounts receivable and bad debts expense c. income statement relationships d. the relationship between sales and accounts receivable 27. Holman Company uses the percentage of credit sales method. Cash sales are $1,000,000 and credit sales are $4,000,000. Management estimates that 1% of sales will be bad. What adjusting entry will Homan Company make to record the...
7, and drag to the Favorites Bar folder. Or import from another browser. Import favorites Kimmel, Accounting, 6e Help 1 System Announcements CALCULATOR PRINTER VERSION BACK Brief Exercise 215 The ledger of the Ramirez Company at the end of the current year shows Accounts Receivable of $200,000. If Allowance for Doubtful Accounts has a credit balance of $3,000 in the trial balance and bad debts are expected to be 8% of accounts receivable, journalize the adjusting entry for end of...
Cite all sources.
Please answer the following question(s):
1. Compare and contrast the direct write-off method and the
allowance method for bad debts.
2. Explain when the expense for uncollected accounting receivable
is recognized for each method. Why?
3. Why is the direct write-off method not considered to follow
generally accepted accounting principles (GAAP)?
4. Discuss the allowance method and the direct write-off method of
accounting for bad debts. When is the expense for uncollected
accounts receivable recognized under each...
If a company uses the allowance method of accounting for bad
debts which one of the following is true? Violates the matching
principle it will record bad debt only when an account is
determined to be uncollectible
If a company uses the allowance method of accounting for bad debts, which one of the following statements is true? O A. It violates the matching principle O B. It will record bad debts only when an account is determined to be uncollectible...
Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000...
Question 22 (10 points) This company uses the Direct Write Off Method for accounting for bad debts: Prepare the following entries. Jan. 2nd - Wrote off $6,100 owed by Jim Jones who has filed bankruptcy May 7th - Wrote off $2,000 owed by Jane Lewis who has not made a payment in over a year Nov 3rd - Reinstated the account of Jane Lewis which was written off May. 7th and received $2,000 full payment Dec 5th - Received $700...
QS 7-4 Distinguishing between allowance method and direct write-off method LO P1, P2 Indicate whether each statement best describes the allowance method or the direct write-off method. List Method 1. Estimates bad debts expense related to the sales recorded in that period. 2. Matches the estimated loss from uncollectible accounts receivable against the sales they helped create. Usually does not best match sales and expenses because bad debts expense is not recorded until an account becomes uncollectible, which usually occurs...
When the direct write-off method is used: Multiple Choice 0 the estimated amount of bad debts is debited to Bad Debt Expense. 0 the estimated amount of bad debts is debited to Allowance for Doubtful Accounts the estimated amount of bad debts is debited to which account Accounts Receivable. 0 bad debts are not estimated 0 A company bought land and a building for $128,000. The building has a useful life of 20 years. Why should the company split the...
Multiple Choice Question 84 Vaughn Company uses the percentage ot receivables method for recording bad debt expense. The accounts receivable balance is 5599000 and credit sales are $2640000. Management estimates that 3% of accounts receivable will be uncollectible. What adjusting entry will Vaughn Company make to record bad debt expense if the Allowance for Doubtful Accounts has a $5200 credit balance before adjustment? 0 Bad Debt Expense 17970 Accounts Receivable 17970 Bad Debt Expense 12770 Allowance for Doubtful Accounts 12770...
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