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Under the allowance method, the entry to reinstate an account previously written off: A)

Under the allowance method, the entry to reinstate an account previously written off: A)

 Under the allowance method, the entry to reinstate an account previously written off:

A) increases total assets

B) increases net income

C) decreases net income

D) has no effect on net income

12) Which principle of accounting prescribes the use of the allowance method of accounting for bad debts?

A) full disclosure principle

B) historical cost principle

C) revenue recognition principle

D) matching principle

13) When using the direct write-off method to write off an uncollectible account, it will be necessary to credit:

A) the Allowance for Uncollectible Accounts account

B) the Uncollectible-Account Expense account

C) the Accounts Receivable account

D) no entry is required when using the direct write-off method

14) After a customer's account has been written off under the allowance method, the customer sends the company the amount owed. Before the receipt of cash can be recorded, the company must first:

A) debit Allowance for Uncollectible Accounts

B) credit Uncollectible-Account Expense

C) debit Accounts Receivable

D) credit Accounts Receivable

15) Under the allowance method, the entry to write off a $1,425 uncollectible account includes:

A) a debit to Accounts Receivable for $1,425

B) a credit to Uncollectible-Account Expense for $1,425

C) a credit to Allowance for Uncollectible Accounts for $1,425

D) a debit to Allowance for Uncollectible Accounts for $1,425

16) Under the direct write-off method, the entry to write off an uncollectible account of $1,250 includes:

A) a debit to Accounts Receivable for $1,250

B) a credit to Uncollectible-Account Expense for $1,250

C) a debit to Uncollectible-Account Expense for $1,250

D) a debit to Allowance for Uncollectible Accounts for $1,250

17) Under the percentage-of-sales method, the estimate of bad debts for the period:

A) is based on the balance in the Accounts Receivable account

B) is based on aging accounts receivable

C) is based on a percentage of net credit sales

D) is based on a percentage of net accounts receivable

18) Under the aging-of-accounts-receivable method:

A) the balance in accounts receivable prior to adjustment must be considered

B) the balance in Allowance for Uncollectible Accounts prior to adjustment is ignored

C) the balance in Allowance for Uncollectible Accounts prior to adjustment must be considered

D) the balance in Uncollectible-Account Expense prior to adjustment must be considered

19) Using the aging-of-accounts-receivable method, you estimate that total uncollectible accounts are $3,800. The Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $1,100. The amount of the adjusting entry should be:

A) $4,900

B) $3,800

C) $2,700

D) $1,100

20) Using the aging-of-accounts-receivable method, you estimate that total uncollectible accounts are $3,800.The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $1,100. The amount of the adjusting entry should be:

A) $4,900

B) $3,800

C) $2,700

D) $1,

Tripti 07-Dec-2019

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