When using the allowance method for accounting for bad debts, accounts receivable is reported on the balance sheet at the expected net realizable value. When a particular receivable from a customer ultimately is determined to be uncollectible and is written off, the recording of this event will Group of answer choices A)decrease the net realizable value of the accounts receivable. B)have an effect that is not determinable from the information given. C)increase the net realizable value of the accounts receivable. D)decrease total current assets. e)None of the above

When using the allowance method for accounting for bad debts, accounts receivable is reported on the balance sheet at the expected net realizable value. When a particular receivable from a customer ultimately is determined to be uncollectible and is written off, the recording of this event will Group of answer choices A)decrease the net realizable value of the accounts receivable. B)have an effect that is not determinable from the information given. C)increase the net realizable value of the accounts receivable. D)decrease total current assets. e)None of the above

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10MC: Which of the following estimation methods considers the amount of time past due when computing bad...

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Similar questions

Which method delays recognition of bad debt until the specific customer accounts receivable is identified? A. income statement method B. balance sheet method C. direct write-off method D. allowance method
Each time an account is written off under the direct write-off method, Bad Debt Expense is debited.
Which account type is used to record bad debt estimation and is a contra account to Accounts Receivable?
Which of the following estimation methods considers the amount of time past due when computing bad debt? A. balance sheet method B. direct write-off method C. income statement method D. balance sheet aging of receivables method
When an account is written off under the allowance method, there should be a debit to Bad Debt Expense.
When the allowance method of recognizing bad debt expense is used, the allowance for doubtful accounts would decrease when Account previously written off is collected Specific uncollectible account is written off Specific account receivable is collected Account previously written off becomes collectible
Which among the statements is not correct? a. Net realizable value of accounts receivable results when accounts receivable is reduced by allowance for doubtful accounts b. Credit balances in accounts receivable arising from customer's advances should be excluded from accounts receivable c. The allowance method of recording bad debt loss is the one consistent with accrual accounting. d. answer not given
When an uncollectible account is recovered after it has been written off, which of the following accounts will be credited in the process? O Allowance for Doubtful Accounts and Cash O Accounts Receivable and Allowance for Doubtful Accounts O Cash and Account Receivable O Allowance for Doubtful Accounts and Bad Debts Expense
When a large account receivable balance is due from one client it is logical to use the direct write-off method to adjust the bad debt expense and accounts receivable balance. Under different circumstances, another method is used called the allowance method. Discuss the best reason(s) for using the allowance method and give some examples of companies that are likely to use that method. Also explain why it would ever be appropriate to use the direct write-off method, especially since it is not GAAP.
When a large account receivable balance is due from one client it is logical to use the direct write-off method to adjust the bad debt expense and accounts receivable balance. Under different circumstances, another method is used called the allowance method. Discuss the best reason(s) for using the allowance method and give some examples of companies that are likely to use that method. Also explain why it would ever be appropriate to use the direct write-off method, especially since it is not GAA
Using the following key, identify the effects of the following transactions or conditions on the various financial statement elements: I = increases; D = decreases; NE = no effect. A.credit sale b. Collection of a portion of accounts receivable c. Estimate of bad debts d. Write-off of a specific uncollectible account
1. When the direct write-off method is used to record a bad debt, the Bad Debts Expense account is debited and the Accounts Receivable account is credited. True or False