Question

If a company has options, why would it choose the allowance method to account for doubtful...

  • If a company has options, why would it choose the allowance method to account for doubtful accounts?
  • What is an AR aging? How is it used?
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

When the firm makes the bad debts adjusting entry, it does not know which specific accounts will become uncollectible. ... When we decide a customer will not pay the amount owed, we use the Allowance for Doubtful accounts to offset this loss instead of Bad Debt Expense.

Accounts receivable aging (tabulated via an aged receivables report) is a periodic report that categorizes a company's accounts receivable according to the length of time an invoice has been outstanding. It is used as a gauge to determine the financial health of a company's customers

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
-A company has $287,000 in credit sales. The company uses the allowance method to account for...
-A company has $287,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $2,210 credit balance. If the company estimates that $7,670 of accounts will be uncollectible based on an aging of Accounts? Receivable, what will be the amount of the journal entry to record estimated uncollectible?accounts? A. $2,210 B. 7,670 C. $9,880 D. $5,460
The following information is available for Tugboat Company: Allowance for doubtful accounts, January 1, 2020: $7,000...
The following information is available for Tugboat Company: Allowance for doubtful accounts, January 1, 2020: $7,000 CR Credit sales during 2020: $270,000 Accounts receivable written off in 2020: $2,800 After reviewing the aging of Accounts Receivable, management has determined that the ending balance in the Allowance for Doubtful Accounts should be $7,500. What amount should Tugboat record as bad debt expense for 2020? Question 7 options: $3,300 $4,200 $7,400 $7,500
Daley Company estimates uncollectible accounts using the allowance method on December 31. It prepared the following...
Daley Company estimates uncollectible accounts using the allowance method on December 31. It prepared the following aging of receivables analysis. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 570,000 $ 396,000 $ 90,000 $ 36,000 $ 18,000 $ 30,000 Percent uncollectible 1 % 2 % 5 % 7 % 10 % a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $666,000 and sales for the year total $7,550,000. The allowance account before adjustment has a credit balance of $9,000. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a credit balance of $9,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $28,800. The allowance account before...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $718,000 and sales for the year total $8,140,000. The allowance account before adjustment has a debit balance of $9,700. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $9,700. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $31,000. The allowance account before...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,110,000 and sales for the year total $12,590,000. The allowance account before adjustment has a debit balance of $15,000. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $15,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $48,000. The allowance account before...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $2,950,000 and sales for the year total $27,400,000. The allowance account before adjustment has a debit balance of $9,500. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $9,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $188,000. The allowance account before...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has...
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,154,000 and sales for the year total $13,090,000. The allowance account before adjustment has a credit balance of $15,600. Bad debt expense is estimated at 1/4 of 1% of sales. The allowance account before adjustment has a credit balance of $15,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $49,900. The allowance account before...
3. What is the allowance for doubtful accounts? 4. Describe the allowance method for writing off...
3. What is the allowance for doubtful accounts? 4. Describe the allowance method for writing off a specific account receivable. 5. Your client just called their accountant (you). They have identified a customer account receivable for $4,000 that should be written off (the company went bankrupt). The client asked how will this write off impact their net income? a. Explain to your customer (and me) why there is no impact to net income. b. Why might you tell the customer...
Johnny Goodman Inc (JGI) is a large public company that operates in the brewing industry. Selected...
Johnny Goodman Inc (JGI) is a large public company that operates in the brewing industry. Selected financial information from their most recent financial statements for the year ending December 31, 2010 is presented below.Current Assets$4,500,000Current Liabilities$2,800,000JGI currently uses the AR (accounts receivable) aging method to value their AFDA (Allowance for Doubtful Account). The accountant tells you that if he had used the percentage of Sales allowance method, the AFDA balance would have been $25,000 higher. If JDI used the percentage...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT