29. The form of the adjusting entry to record estimated bad debts under the allo
ID: 2461022 • Letter: 2
Question
29. The form of the adjusting entry to record estimated bad debts under the allowance method is:
a.Allowance for bad debts XX
accounts receivable xx
b. bad debts expense xx
accounts receivable xx
c. bad debts expense xx
Allowance for bad debts XX
d. Allowance for bad debts XX
bad debts expense xx
e. none of the above
30. When using the allowance method to record bad debts, if a specific customer account is identified as uncollectible the appropriate journal entry to record this fact is:
a. Allowance for bad debts XX
accounts receivable xx
b. bad debts expense xx
accounts receivable xx
c. bad debts expense xx
Allowance for bad debts XX
d. Allowance for bad debts XX
bad debts expense xx
e. none of the above
31. When using the allowance method to record bad debts, if a specific customer account is written off as uncollectible, and later in the same year the customer pays the balance owed, the form of the journal entry to record this activity is:
Journal entry
a.
Cash XX
Accounts receivable XX
b.
Cash XX
bad debts expense xx
c.
Cash XX
Allowance for bad debts XX
d.
Accounts receivable XX
bad debts expense xx
Cash XX
Accounts receivable XX
e.
Accounts receivable XX
Allowance for bad debts XX
Cash XX
Accounts receivable XX
32. Target began the year with a $100 cr. Balance in the ‘allowance for bad debts’ account. During the year the company estimated that bad debts expense would be 1% of credit sales. Credit sales for the year totaled $2,000. After all necessary adjustments, what will be the ending balances in the ‘bad in the expense’ and the ‘allowance for bad debts’ accounts at year end?
Bad debts expense
Allowance for bad debts
a.
20 dr
120 cr
b.
20 cr
80 cr
c.
120 cr
120 dr
d.
120 dr
120 cr
e.
None of the avove
Journal entry
a.
Cash XX
Accounts receivable XX
b.
Cash XX
bad debts expense xx
c.
Cash XX
Allowance for bad debts XX
d.
Accounts receivable XX
bad debts expense xx
Cash XX
Accounts receivable XX
e.
Accounts receivable XX
Allowance for bad debts XX
Cash XX
Accounts receivable XX
Explanation / Answer
29 )correct option is " c"
bad debts expense xx Allowance for bad debts
30) correct option is "A"
Allowance for bad debts XX accounts receivable
31) correct option is "E"
Accounts receivable XX
Allowance for bad debts XX
[to make receivable again due that earlier written off]
Cash XX
Accounts receivable XX
'[To record collectibility of receivable]
32)Bad debt expense = 2000 *.01= 20 Dr
Allowance = 100 +20 = 120 cr
correct option is "A"
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