Question

A company that uses the direct write-off method records the bad debt: a.   as a percentage...

A company that uses the direct write-off method records the bad debt:

a.   as a percentage of net credit sales during the year

b.   as an amount that is based on the aging of accounts receivable

c.   as an amount that is based on the aging of accounts receivable after considering the current balance in the allowance for doubtful accounts account.

d.   as the receivable is deemed worthless

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

d.as the receivable is deemed worthless.

When a company uses the direct write off method, the bad debts are written off as and when they occur.

Bad debt is recorded as a percentage of net credit sales during the year if it follows percentage of credit sales method.

Bad debt would be recorded as an amount that is based on the aging of accounts receivable after considering the current balance in the allowance for doubtful accounts account, it follows the aginig of accounts receivable method.

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
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2018, net credit sales totaled $6,400,000, and the estimated bad debt percentage is 1.40%. The allowance for uncollectible accounts had a credit balance of $61,000 at the beginning of 2018 and $49,500, after adjusting entries, at the end of 2018. Required: 1. What is bad debt expense for 2018 as a percent of net credit sales?...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2018, net credit sales totaled $6,500,000, and the estimated bad debt percentage is 1.50%. The allowance for uncollectible accounts had a credit balance of $62,000 at the beginning of 2018 and $50,000, after adjusting entries, at the end of 2018. Required: 1. What is bad debt expense for 2018 as a percent of net credit sales?...
Momrow Inc. uses the percentage of credit sales method to estimate its bad debt expense and...
Momrow Inc. uses the percentage of credit sales method to estimate its bad debt expense and estimates that 5% of credit sales will result in uncollectible accounts. The company had $320,000 of net credit sales during the year, and its Allowance for Doubtful Accounts has an unadjusted credit balance of $6,300. After making the adjusting entry for to record bad debt expense, what is the ending balance in the Allowance for Doubtful Accounts account? Multiple Choice $12,600. $9,700. $16,000. $22,300.
Entries for Bad Debt Expense under the Direct Write-Off and Allowance Method Casebolt Company wrote off...
Entries for Bad Debt Expense under the Direct Write-Off and Allowance Method Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: Customer Amount Shawn Brooke $11,700 Eve Denton 10,900 Art Malloy 15,100 Cassie Yost 2,800 Total 40,500 a. Journalize the write-offs for under the direct write-off method. If an amount box does not require an entry, leave it blank. b. Journalize the write-offs for under the allowance method. Also,...
rose company uses the percentage of receivables method for recording bad debt expense. the accounts receivable...
rose company uses the percentage of receivables method for recording bad debt expense. the accounts receivable balance is $25,000 and credit sales ar $100,000. management estimates that 6% of accounts receivable will be uncollectible. what adjusting entry will rose company make if the allowance for doubtful accounts has a balance of $250 before adjustment?
1. Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $72000. If...
1. Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $72000. If the balance of the Allowance for Doubtful Accounts is an $14400 debit before adjustment, what is the balance after adjustment? A. $72000 B. $14400 C. $86400 D. $57600 2. In reviewing the accounts receivable, the cash receivable value is $25400 before the write-off of a $1800 account. What is the cash receivable value after the write-off? A. $25400 B. $1800 C. $27200 D. $23600...
Oriole Company uses the percentage-of-receivables basis to record bad debt expense. Accounts receivable (ending balance) $510,000...
Oriole Company uses the percentage-of-receivables basis to record bad debt expense. Accounts receivable (ending balance) $510,000 (debit) Allowance for doubtful accounts (unadjusted) 5,400 (debit) The company estimates that 2% of accounts receivable will become uncollectible. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) What is the ending (adjusted) balance in Allowance for Doubtful...
Crane Company uses the percentage-of-receivables basis to record bad debt expense. Accounts receivable (ending balance) $630,000...
Crane Company uses the percentage-of-receivables basis to record bad debt expense. Accounts receivable (ending balance) $630,000 (debit) Allowance for doubtful accounts (unadjusted) 4,400 (debit) The company estimates that 3% of accounts receivable will become uncollectible. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (b) What is the ending (adjusted) balance in Allowance for Doubtful...
Crane Company uses the percentage of sales method for recording bad debts expense. For the year,...
Crane Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $590000 and credit sales are $2600000. Management estimates that 3% is the sales percentage to use. What adjusting entry will Crane Company make to record the bad debts expense? Bad Debt Expense 78000     Accounts Receivable 78000 Bad Debt Expense 17700     Accounts Receivable 17700 Bad Debt Expense 17700    Allowance for Doubtful Accounts 17700 Bad Debt Expense 78000     Allowance for Doubtful Accounts 78000
Apollo Company uses the direct write-off method of recording credit losses. Apollo Company wrote off the...
Apollo Company uses the direct write-off method of recording credit losses. Apollo Company wrote off the $3,200 account of Duck Co. in October 2016. In February 2017, Apollo Company received a final $1,200 payment from Duck’s trustee in bankruptcy. Apollo should make the following entry or entries to record the payment: Select one: A. Accounts Receivable--Duck Co. 1,200 Bad Debts Expense 1,200 Cash 1,200 Accounts Receivable--Duck Co. 1,200 B. Allowance for Doubtful Accounts 1,200 Bad Debts Expense 1,200 C. Accounts...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT