Which financial statement reports Bad Debts Expense?
A) Balance sheet
B) Income statement
C) Statement of owner's equity
D) General journal
22) The two approaches for estimating bad debts are
A) balance sheet and income statement methods.
B) balance sheet and net realizable value methods.
C) income statement and net realizable value methods.
D) net realizable value method and direct write-off method.
23) The journal entry to record Harry's Hats estimate that 1% of credit sales will be uncollectible would include
A) debit Bad Debts Expense, credit Accounts Receivable.
B) debit Sales Collection Expense, credit Allowance for Doubtful Accounts.
C) debit Bad Debts Expense, credit Allowance for Doubtful Accounts
D) debit Allowance for Doubtful Accounts, credit Accounts Receivable.
24) Which method uses a percentage of net credit sales to calculate the Bad Debts Expense?
A) Income statement approach
B) Balance sheet approach
C) Aging the accounts receivable
D) Direct write-off
25) Bob's Bakery increases Allowance for Doubtful Accounts $300 at year-end. As a result,
A) total assets are unchanged.
B) net income is unchanged.
C) net assets increase.
D) net assets decrease.
26) Using the balance sheet method, estimated uncollectible accounts are $3,000. If the balance of Allowance for Doubtful Accounts is $800 debit before adjustment, what is bad debts expense adjustment for the period?
27) The balance sheet approach estimates a percentage of Accounts Receivable that is uncollectible.
28) The income statement approach estimates a percentage of sales that is uncollectible.
29) Using the balance sheet approach, the balance in Allowance for Doubtful Accounts is taken into consideration when finding the adjustment.
30) Using the income statement approach, the balance in Allowance for Doubtful Accounts is ignored.
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