Net Accounts Receivable: Allowance for Doubtful Accounts

When writing off an account that becomes uncollectible, a. Allowance for Doubtful Accounts should be credited. b. Accounts Receivable should be credited. c. Bad Debts Expense should be credited. d. Sales should be debited.

The year-end adjusting entry to recognize uncollectible accounts expense will a. Increase assets and decrease equity. b. Decrease assets and decrease equity. c. Increase liabilities and increase equity. d. Decrease liabilities and increase equity.

On January 1, the Accounts Receivable balance was $18,500 and the balance in the Allowance for Doubtful Accounts was $1,400. On January 15, a $400 uncollectible account was written-off. The net realizable value of accounts receivable immediately after the write-off is: a. $18,100. b. $16,700. c. $17,100. d. $17,500.

Under the allowance method for estimating uncollectible accounts, the journal entry to record the estimated bad debts a. reduces total assets b. increases net income c. has no effect on total assets d. has no effect on net income e. None of the above is correct.

The M Company earned $95,000 of revenue on account during the year. There was no beginning balance in the accounts receivable and allowance accounts. During the year, M collected $68,000 of cash from customers on account. The company estimates that it will be unable to collect 3% of its sales on account. The net realizable value of accounts receivable at the end of the year was a. $24,150. b. $24,960. c. $29,850. d.  $27,000.

Which one of the following is not an accurate description of the Allowance for Doubtful Accounts? a. The account is an income statement account. b. The account is a contra account. c. The amount of the Allowance for Doubtful Accounts decreases the net realizable value of a company's receivables. d. The account is increased by an estimate of uncollectible accounts expense.

On December 31, 2002, Typical Fashions had balances in its Accounts receivable and Allowance for uncollectible accounts of $48,400 and $940, respectively. During 2003, Typical Fashions wrote off $820 in Accounts receivable and determined that there should be an Allowance for uncollectible accounts of $1,140 at December 31, 2003. Bad debt expense for 2003 would be: a. $   320. b. $1,140. c. $   820. d. $1,020. 

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 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. have no effect on the net realizable value of the accounts receivable.

Empire Dynasty has net credit sales of $900,000 for the year and it estimates that uncollectible accounts will be 2% of sales. If Allowance for Doubtful Accounts has a credit balance of $1,000 prior to adjustment, its balance after adjustment will be a credit of a. $18,000. b. $19,000. c. $17,980. d. $17,000.