Allowance Method

When an account becomes uncollectible and must be written off,

• Bad Debt Expense should be credited.

• Allowance for Doubtful Accounts should be credited.

• Sales Revenue should be debited.

• Accounts Receivable should be credited.

Two methods of accounting for uncollectible accounts are the

• allowance method and the accrual method.

• direct write-off method and the accrual method.

• direct write-off method and the allowance method.

• allowance method and the net realizable method.

To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a

• debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.

• debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.

• debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.

• debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable.

Valli Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $700,000 and credit sales are $2,500,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Valli Company make to record the bad debts expense?

• Bad Debt Expense 32,000

  Allowance for Doubtful Accounts 32,000

• Bad Debt Expense 25,000

  Accounts Receivable 25,000

• Bad Debt Expense 25,000

  Allowance for Doubtful Accounts 25,000

• Bad Debt Expense 32,000

  Accounts Receivable 32,000

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $12,000. If the balance of the Allowance for Doubtful Accounts is $2,500 credit before adjustment, what is the amount of bad debt expense for that period?

• $2,500

• $9,500

• $12,000

• $14,500

What are the double entries to record bad debt?

• dr. Bad Debt, cr. Allowance for Doubtful Debts

• dr. Profit and Loss, cr. Bad Debt

• dr. Bad debt, cr. Profit and Loss

• dr. Bad debt, cr. Accounts Receivable

A company estimates that $20,000 of its $500,000 of accounts receivable will be uncollectible. Its Allowance for Doubtful Accounts presently has a debit balance of $3,000. The adjusting entry will include a ____________ to Allowance for Doubtful Accounts.

• debit of $3000

• credit of $3000

• debit of $23,000

• credit of $23,000

A company estimates that $20,000 of its $500,000 of account receivable will be uncollectible. Its Allowance for Doubtful Accounts presently has a credit balance of $8,000. The adjusting entry will include a _____________ to the Allowance for Doubtful Accounts.

• debit of $12,000

• credit of $12,000

• debit of $28,000

• credit of$28,000

Allowance for Uncollectible Accounts is the contra account to

• Accounts Receivable

• Accounts Payable

• Office Equipment

• Accumulated Depreciation

Under allowance method, the journal entry to write off an uncollectible account is:

• Allowance for Doubtful Accounts Dr. & Accounts Receivable Cr.

• Accounts receivable Dr. & Allowance for Doubtful Accounts Cr.

• Bad Debts Expense Dr. & Accounts Receivable Cr.

• Accounts Receivable Dr. & Bad Debts Expense Cr.