Vaughn Music Company learns the accounts receivable for customer Al Badnews is uncollectib
Vaughn Music Company learns the accounts receivable for customer Al Badnews is uncollectible. The journal entry under the allowance method would be
A) debit Allowance for Doubtful Accounts, credit Accounts Receivable.
B) debit Sales, credit Allowance for Doubtful Accounts.
C) debit Bad Debts Expense, credit Accounts Receivable.
D) debit Allowance for Doubtful Accounts, credit Bad Debts Expense.
12) When customer Smith's account is written off under the allowance method,
A) net assets will be unchanged.
B) net income will decrease.
C) net income will increase.
D) total assets will increase.
13) A debit balance in Allowance for Doubtful Accounts means
A) a posting error has been made.
B) bad debts losses have been overestimated.
C) more losses have been written off than estimated.
D) the balance sheet method is being used.
14) Bad Debts Recovered is a(n)
A) asset account.
B) liability account.
C) revenue account.
D) expense account.
15) When an account receivable is written off as uncollectible, it decreases Bad Debts Expense.
16) If a recovery of a written-off account is made in the same year using the allowance method, the Bad Debts Recovered account would be used.
17) The subsidiary ledger for accounts receivable is affected when posting the entry to record a written-off account.
18) The net realizable value of accounts receivable is unchanged when an account is written off as uncollectible.
19) If an estimate is recorded for uncollectible accounts, it is still necessary to write off an account that is determined to be uncollectible.
20) Bad Debts Recovered is an expense account.