Question :
81. Allowance for Doubtful Accounts has a credit balance of $1,400 : 1251967
81. Allowance for Doubtful Accounts has a credit balance of $1,400 at the end of the year (before adjustment). The company prepares an analysis of customers’ accounts to estimate the amount of uncollectible accounts of $17,900. Which of the following adjusting entries would be made to record the Bad Debt Expense for the year?
A. debit allowance for doubtful Accounts, $16,500; credit Bad Debt Expense, $16,500
B. debit Allowance for Doubtful Accounts $19,300; credit Bad Debt Expense, $19,300
C. debit Bad Debt Expense, $19,300; credit Allowance for Doubtful Accounts, $19,300
D. debit Bad Debt Expense, $16,500; credit allowance for Doubtful Accounts, $16,500
82. Allowance for Doubtful Accounts has a debit balance of $1,200 at the end of the year (before adjustment). The company prepares an analysis of customers’ accounts and estimates the amount of uncollectible accounts to be $13,900. Which of the following adjusting entries is needed to record the Bad Debt Expense for the year?
A. debit Bad Debt Expense, $15,100; credit Allowance for doubtful Accounts, $15,100
B. debit Allowance for Doubtful Accounts, $15,100; credit Bad Debt Expense, $15,100
C. debit Allowance for Doubtful Accounts, $12,700; credit Bad Debt Expense, $12,700
D. debit Bad Debt Expense, $12,700; credit Allowance for Doubtful Accounts, $12,700
83. Allowance for Doubtful Accounts has a debit balance of $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 $600,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is
A. $24,500
B. $23,500
C. $24,000
D. cannot be determined
84. Allowance for Doubtful Accounts has a credit balance of $800 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,000. Based on the estimate above, which of the following adjusting entries should be made?
A. debit Bad Debt Expense, $800; credit Allowance for Doubtful Accounts, $800
B. debit Bad Debt Expense, $15,200; credit Allowance for Doubtful Accounts, $15,200
C. debit Allowance for Doubtful Accounts, $800; credit Bad Debt Expense, $800
D. debit Bad Debt Expense, $16,800; credit Allowance for Doubtful Accounts, $16,800
85. When using the allowance method to estimate uncollectible accounts receivable based on an analysis of receivables shows that $790 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $120. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:
A. $120
B. $790
C. $670
D. $910
86. Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of net credit sales. If net credit sales are $300,000, the amount of the adjusting entry to record the estimated uncollectible accounts receivables is
A. $8,500
B. $8,500
C. $9,000
D. Cannot be determined
87. Allowance for Doubtful Accounts is classified as a(n) ______ and has a normal ______ balance.
A. equity, credit
B. contra-asset, debit
C. equity, debit
D. contra-asset, credit
88. Under the allowance method of accounting for uncollectible receivables, writing off an uncollectible account.
A. affects only income statement accounts.
B. is not an acceptable practice.
C. affects only balance sheet accounts.
D. affects both balance sheet and income statement accounts.
89. When comparing the direct write-off method and the allowance method of accounting for uncollectible receivables, a major difference is that the direct write-off method
A. uses a percentage of sales method to estimate uncollectible accounts.
B. is used primarily by large companies with many receivables.
C. is used primarily by small companies with few receivables.
D. uses an allowance account.
90. When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the general journal?
A. Bad Debt Expense 500
Allowance for Doubtful Accounts 500
B. Bad Debt Expense 500
Accounts Receivable – Bob Smith 500
C. Cash 300
Allowance for Doubtful Accounts 200
Accounts Receivable – Bob Smith 500
D. Cash 500
Accounts Receivable – Bob Smith 500
