7. Flora Co. uses the allowance method of accounting for uncollectible accounts

Question

7.

Flora Co. uses the allowance method of accounting for uncollectible accounts receivable. The entry to write off an account that has been determined to be uncollectible would be to

a.debit Accounts Receivable and credit Bad Debt Expense.

b.debit Allowance for Doubtful Accounts and credit Accounts Receivable.

c.debit Sales Returns and Allowances and credit Accounts Receivable.

d.debit Bad Debt Expense and credit Allowance for Doubtful Accounts

8.

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and an analysis of accounts receivable in the customer ledger indicates doubtful accounts of $16,000. Which of the following entries records the proper provision for doubtful accounts under the analysis of receivables method?

a.Debit Bad Debt Expense, $15,500; credit Allowance for Doubtful Accounts, $15,500

b.Debit Bad Debt Expense, $500; credit Allowance for Doubtful Accounts, $500

c.Debit Bad Debt Expense, $16,500; credit Allowance for Doubtful Accounts, $16,500

d.Debit Allowance for Doubtful Accounts, $500; credit Bad Debt Expense, $500

Explanation / Answer

7. Allowance for Doubtful Accounts Debit
Accounts Receivable Credit

Feedback: Under the allowance method, the expense is recognized during the period of the sale, and when an account is written off, the allowance is used.

Option b.debit Allowance for Doubtful Accounts and credit Accounts Receivable is correct answer.

8. Bad Debt Expense Debit $15,500
Allowance for Doubtful Accounts Credit $15,500

Option a.Debit Bad Debt Expense, $15,500; credit Allowance for Doubtful Accounts, $15,500 is correct answer.

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.