Which statement is not true? Cash and cash equivalents are the first items repor
ID: 2448571 • Letter: W
Question
Which statement is not true?
Cash and cash equivalents are the first items reported under current assets.
Current assets are normally reported in order of their liquidity.
All receivables that are expected to be realized in cash beyond 265 days are reported in the non-current assets section.
Disclosures related to receivables are reported on the financial statement notes.
If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?
Accounts Receivable
Uncollectible Accounts Expense
Interest Expense
Allowance for Doubtful Accounts
The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be which of the following?
debit Bad Debt Expense; credit Allowance for Doubtful Accounts
debit Bad Debt Expense; credit Accounts Receivable
debit Sales Returns and Allowance; credit Accounts Receivable
debit Allowance for Doubtful Accounts; credit Accounts Receivable
Explanation / Answer
Solution:
(A).
(B). Uncollectible Accounts Expense
(C). Journal Entry For direct write-off uncollectible accounts receivable:
Allowance for Doubtful Accounts A/c Dr
To Accounts Receivables A/c
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