Question : 61. When the allowance method used to account for uncollectible accounts, : 1251991

61. When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when 
A. a customer’s account becomes past due.
B. an account becomes bad and is written off.
C. a sale is made.
D. management estimates the amount of uncollectibles.

62. A debit balance in the Allowance for Doubtful Accounts 
A. is the normal balance for that account.
B. indicates that actual bad debt write-offs have been less than what was estimated.
C. cannot occur if the percentage of receivables method of estimating bad debts is used.
D. indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.

63. To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a 
A. debit to Bad Debs Expense and a credit to Allowance for Doubtful Accounts.
B. debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
C. debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.
D. debit to Loss on Credit Sales and a credit to Accounts Receivable.

64. Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts 
A. Liabilities decrease.
B. Net Income is unchanged.
C. Total Assets are unchanged.
D. Total Assets decrease.

65. Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $300,000 and credit sales are $1,000,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment?
 
A. Bad Debt Expense      13,000
      Allowance for Doubtful Accounts            13,000
B. Bad Debt Expense      15,000
      Allowance for Doubtful Accounts            15,000
C. Bad Debt Expense      17,000
      Allowance for Doubtful Accounts            17,000
D. Bad Debt Expense      20,000
      Allowance for Doubtful Accounts            20,000

66. You have just received notice that a customer of yours with an Account Receivable balance of $100 has gone bankrupt and will not make any future payments.  Assuming you use the allowance method, the entry you make is to
 
A. debit Bad Debt Expense and credit Allowance for Doubtful Accounts.
B. debit Bad Debt Expense and credit Accounts Receivable.
C. debit Allowance for Doubtful Accounts and credit Accounts Receivable.
D. debit Allowance for Doubtful Accounts and credit Bad Debt Expense

67. The balance in Allowance for Doubtful Accounts will directly impact the end of period adjustment for the bad debt expense when using which of the following methods?
 
A. Allowance method
B. Direct write-off method
C. Accrual method
D. Net realizable method

68. An aging of a company’s accounts receivable indicates the estimate of uncollectible receivables totals $2,000.  If Allowance for Doubtful Accounts has a $200 credit balance, the adjustment to record the  bad debt expense for the period will require a
 
A. debit to Bad Debt Expense for $2,200.
B. debit to Bad Debt Expense for $2,000.
C. debit to Bad Debt Expense for $1,800.
D. credit to Allowance for Doubtful Accounts for $3,000.

69. An aging of a company’s accounts receivable indicates that the estimate of uncollectible accounts totals $4,000.  If Allowance for Doubtful Accounts has a $1,200 debit balance, the adjustment to record the bad debt expense for the period will require a
 
A. debit to Bad Debt Expense for $5,200.
B. debit to Bad Debt Expense for $4,000.
C. debit to Bad Debt expense for $2,800
D. credit to Allowance for Doubtful Accounts for $5,000.

70. An aging of a company’s accounts receivable indicates that estimate of the uncollectible accounts totals $5,000.  If Allowance for Doubtful Accounts has a $1,200 credit balance, the adjustment to record the bad debt expense for the period will require a
 
A. debit to Allowance for Doubtful Accounts for $3,800.
B. debit to Bad Debt Expense for $3,800.
C. debit to Allowance for Doubtful Accounts for $5,000.
D. credit to Allowance for Doubtful Accounts for $5,000.