Question

A method of estimating bad debts that focuses on the balance sheet rather than the income...

A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on

a.

direct write-off

b.

aging the trade receivable accounts

c.

credit sales

d.

specific accounts determined to be uncollectible
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution is Option b. Aging the trade receivable accounts

It is a method in which accounts receivables are classified according to their ages by arranging them with respect to the dates they are due to be received and then allowing bad-debts on the basis of the aging schedule. It is based on the accounts receivable balances which is a Balance sheet item.

Hence, a method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on aging the trade receivable accounts. All others are based on income statement items and balances.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
QUESTION 1 A method of estimating bad debts that focuses on the balance sheet rather than...
QUESTION 1 A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on a. direct write-off b. aging the trade receivable accounts c. credit sales d. specific accounts determined to be uncollectible QUESTION 2 The amount reported as "Cash" on a company's balance sheet normally should exclude a. postdated checks that are payable to the company b. cash in a payroll account c. undelivered checks written and signed...
QUESTION 1 A method of estimating bad debts that focuses on the balance sheet rather than...
QUESTION 1 A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on a. direct write-off b. aging the trade receivable accounts c. credit sales d. specific accounts determined to be uncollectible QUESTION 2 In a business combination, goodwill is defined as the excess of cost over the a. fair value of assets acquired b. fair value of assets acquired less the liabilities assumed c. book value of...
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning...
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2016, the allowance account had a credit balance of $5,796. Credit sales for 2016 totaled $479,685 and the year-end accounts receivable balance was $40,234. During this year, $5,429 in receivables were determined to be uncollectible and were written off. Manda Panda anticipates that 2% of all credit sales will ultimately become uncollectible. What is the balance in the allowance for bad debts Manda...
.   What is an advantage of using the percent age of receivables method of estimating uncollectible...
.   What is an advantage of using the percent age of receivables method of estimating uncollectible accounts? a.       The direct write-off method does a better job of matching revenues and expenses than the allowance method. b.       The percentage-of-sales approach takes into account the existing balance in the Accounts Receivable account. c.       The direct write-off method takes into account the existing balance in the Allowance for Bad Debts account. d.       The percentage-of-receivables approach takes into account the existing balance in the...
Which method requires first estimating the desired amount for the Allowance for Doubtful Accounts and then...
Which method requires first estimating the desired amount for the Allowance for Doubtful Accounts and then determining the amount of the expense required to get to this desired balance given the amount of the unadjusted balance? Multiple Choice A. Percentage of bad debts method B. Direct write-off method C. Aging of accounts receivable method D. Percentage of credit sales method
Estimating Bad Debts Expense and Reporting Receivables At December 31, Barber Company had a balance of...
Estimating Bad Debts Expense and Reporting Receivables At December 31, Barber Company had a balance of $294,000 in its accounts receivable and an unused balance of $1,820 in its allowance for uncollectible accounts. The company then aged its accounts as follows. Current$242,200 1–60 days past due33,600 61–180 days past due11,900 Over 180 days past due6,300 Total accounts receivable$294,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 1–60 days past due, 15% of balances 61–180...
lossom Company uses the allowance method of accounting for bad debts. The company produced the following...
lossom Company uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end. (a) Calculate the total estimated bad debts based on the information below. Number of Days Outstanding Total 0–30 31–60 61–90 91–120 Over 120 Accounts receivable $406,000 $233,000 $89,000 $50,000 $24,000 $10,000 % uncollectible 1% 4% 5% 9% 11% Estimated bad debts $enter estimated bad debts in dollars $enter estimated bad debts in dollars $enter estimated bad debts...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2013, Sunil Company had a...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2013, Sunil Company had a balance of $600,000 in its accounts receivable and an unused balance of $6,720 in its allowance for uncollectible accounts. The company then aged its accounts as follows: Current $486,400 0-60 days past due 70,400 61-180 days past due 28,800 Over 180 days past due 14,400 Total accounts receivable $600,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 0-60...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2016, Sunil Company had a...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2016, Sunil Company had a balance of $375,000 in its accounts receivable and an unused balance of $4,200 in its allowance for uncollectible accounts. The company then aged its accounts as follows: Current $304,000 0–60 days past due 44,000 61–180 days past due 18,000 Over 180 days past due 9,000 Total accounts receivable $375,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 0–60...
A company uses the aging of accounts receivable method to estimate its bad debts expense. On...
A company uses the aging of accounts receivable method to estimate its bad debts expense. On December 31 of the current year an aging analysis of accounts receivable revealed the following: Accounts Receivable Account Age Estimated Uncollectible $       80,000 1 - 30 days 0.5%            60,000 31 - 60 days 7.0%            40,000 61 - 90 days 10.0%            10,000 Over 90 days 60.0% $     190,000 Total A. Calculate the amount of the Allowance for Doubtful Accounts that should be...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT