Question

True/False. The Allowance for Bad Debts is a contra account to Accounts Receivable.

True/False.

The Allowance for Bad Debts is a contra account to Accounts Receivable.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

This statement is true.

The allowance for bad debts is a contra account to account receivable. Allowance for bad debts is a contra asset account which is associated with account receivables. Allowance for bad debts reflects estimated account that won't be received from debtors. Whenever there is an estimation that any debtors is unable to repay back the debts, the organization has to record for the same. In such cases bad debts expenses is debited and allowance for bad debts is credited. Allowance for bad debts can be reflected in the balance sheet of final statement in two way either credit balance on liabilities side or reduce from account receivables and show net account receivables.

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
6. Accounts Receivable has a balance of $32,000, and Allowance for Bad Debts has a credit...
6. Accounts Receivable has a balance of $32,000, and Allowance for Bad Debts has a credit balance of $3,500. The allowance method is used. What is the net realizable value of Accounts Receivable before and after a $2,100 account receivable is written off? Drawing T-accounts will assist you. A) $26,400; $30,600 B) $26,400; $26,400 C) $28,500; $26,400 D) $28,500; $28,500
Maple Co. provides for bad debts expense at the rate of 5.35% of ending Accounts Receivable....
Maple Co. provides for bad debts expense at the rate of 5.35% of ending Accounts Receivable. On Jan 1, 20X1, the Allowance for Bad Debts was $16,000. There were $16,000 of accounts written off during the year. Credit sales for the year were $540,000. Ending Accounts Receivable was $115,000 What is the balance in the Allowance for Bad Debts account?
16. The Allowance for Bad Debts account has a debit balance of $7,000 before the adjusting...
16. The Allowance for Bad Debts account has a debit balance of $7,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger using the aging-of-receivables method, the company's management estimates that uncollectible accounts will be $15,000. What amount of bad debts expense will be reported on the income statement? 19. In reviewing the T-account for Accounts Receivable, you find that the beginning balance is zero, the total increases are $4,900 and...
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...
True or False 1. The allowance for doubtful accounts is reported as a contra-asset on the...
True or False 1. The allowance for doubtful accounts is reported as a contra-asset on the balance sheet. 2. No question. 3. Credit card discounts are reported as operating expenses on an income statement. 4. Gross profit decreases when sales discounts increase.
4. The direct write-off method for uncollectible accounts violates the GAAP matching principle, and is primarily...
4. The direct write-off method for uncollectible accounts violates the GAAP matching principle, and is primarily used by smaller, nonpublic companies. TRUE FALSE 5. The Allowance for Bad Debts is a contra asset account to Accounts Receivable. TRUE FALSE
USS Navy, Inc. uses the allowance method to account for bad debts.  USS Navy had the...
USS Navy, Inc. uses the allowance method to account for bad debts.  USS Navy had the following information after all entries except bad debt expense for the year. Debit balance in Accounts Receivable, $6,500 Credit Sales of $24,000 Credit balance in Allowance for Doubtful Accounts, $12 Navy estimates 6% of outstanding receivables will be uncollectible. 1)How much should be recorded as bad debt expense? 2) What is the net realizable value of accounts receivable?
1. on January 1, 2016, the balance in buying companies allowance for bad debts account was...
1. on January 1, 2016, the balance in buying companies allowance for bad debts account was $13,329. During the first 11 months of the year bad debts expense of $21,037 was recognized. The balance in the allowance for bad that's account at November 30, 2016 was $9807. What was the total of accounts written off during the first 11 months? Bad debts write off= 2. as the result of a comprehensive analysis, it is determined that the December 31, 2016,...
Maple Co. provides for bad debts expense at the rate of 5.64% of ending Accounts Receivable....
Maple Co. provides for bad debts expense at the rate of 5.64% of ending Accounts Receivable. On Jan 1, 20X1, the Allowance for Bad Debts was $9,000. There were $16,000 of accounts written off during the year. Credit sales for the year were $775,000. Ending Accounts Receivable was $120,000. What is the amount of Bad Debt Expense for the year?
Under the allowance method of accounting for bad debts, the company estimates the amount of bad...
Under the allowance method of accounting for bad debts, the company estimates the amount of bad debts before those debts actually occur. True/False
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT