Reconstructing AFDD for Doubtful Debts

The video tutorial covers a sample question on adjusting trial balances, focusing on bad debts and allowances for doubtful debts. It explains how to handle bankrupt accounts and calculate adjustments using financial policies. The tutorial also guides on reconstructing financial data and balancing adjustments, emphasizing the importance of understanding these processes for accounting and finance students. The session concludes with a preview of upcoming topics.

What is the bad class amount for the financial year as mentioned in the trial balance?

• $1,000

• $6,000

• $21,500

• $2,000

What is the opening balance for the allowance for doubtful accounts?

• $21,500

• $1,000

• $2,000

• $6,000

What happens to the account receivable when a customer is found bankrupt?

• It is decreased by $1,000

• It remains unchanged

• It is increased by $6,000

• It is increased by $1,000

Tags

CCSS.6.NS.C.5

How is the account receivable adjusted for the bankrupt customer?

• Increased by $6,000

• No change

• Decreased by $1,000

• Increased by $1,000

What percentage is used to set the allowance for doubtful accounts?

• 10%

• 20%

• 5%

• 15%

Tags

CCSS.6.RP.A.3C

What is the calculated allowance for doubtful accounts after adjustments?

• $1,100

• $3,425

• $1.25

• $3,000

What is the first step in reconstructing the allowance for doubtful debts?

• Recording the balance in your mouth

• Calculating the percentage

• Putting the opening balance

• Transferring $3,000

Which of the following is not a step in reconstructing the allowance for doubtful debts?

• Calculating the percentage

• Putting the opening balance

• Transferring $3,000

• Recording the balance in your mouth

What is the final adjusted allowance for doubtful debts?

• $3,000

• $3,425

• $1.25

• $1,100

What is the correct sequence for balancing adjustments in accounting?

• Opening balance, adjustments, closing balance

• Adjustments, opening balance, closing balance

• Closing balance, opening balance, adjustments

• Adjustments, closing balance, opening balance