When an account is written off using the direct write-off method, net income will:
A) remain the same
D) cannot be determined
32) The best way to account for bad debts is to use the allowance method.
33) Many companies use both the percentage-of-sales and the aging-of-accounts-receivable methods together.
34) Under the allowance method, the entry to record the estimated bad debts for the period includes a credit to Accounts Receivable.
35) Allowance for Doubtful Accounts is a contra account to short term investments.
36) The allowance method of accounting for bad debts records collection losses on the basis of estimates rather than waiting to determine which customers will not pay.
37) Under the allowance method, the entry to write off an account that has been deemed uncollectible has no impact on the net income of the firm.
38) Many companies use both the percentage-of-sales and the aging method to establish their allowance for doubtful accounts.
39) There are two basic ways to estimate uncollectible receivables: the percentage-of-sales method and the aging-of-receivables method.
40) When estimating uncollectible receivables based on the percentage-of-sales method, the adjusting entry will includ
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