Question
In: Accounting
When a company is using the direct write-off method, and an account is written off, the...
When a company is using the direct write-off method, and an account is written off, the journal entry consists of a ________.
Group of answer choices
debit to the Allowance for Bad Debts and a credit to Accounts Receivable
debit to Accounts Receivable and a credit to Cash
credit to Accounts Receivable and a debit to Bad Debts Expense
credit to Accounts Receivable and a debit to Interest Expense
Solutions
Expert Solution
|
Answer)credit to Accounts Receivable and a debit to Bad Debts Expense under direct write off method no allowance is created and the bad account is written off directly to bad debts expense |
ekkarill92 answered 2 years agoRelated Solutions
Under the direct write-off method, the account credited when an account is determined to be uncollectible...
Under the direct write-off method, the account credited when an
account is determined to be uncollectible is
Bad Debt Expense
Sales;
Allowance for Bad Debts
Accounts Receivable
What is the difference between direct write-off method and allowance method? Direct write-off method, a company...
What is the
difference between direct write-off method and allowance
method?
Direct write-off
method, a company does not anticipate bad debt expense. The
allowance method is preferred over the direct write-off method
because the accounts receivable will be presented on the balance
sheet with a reduction called the allowance for doubtful
accounts.
Jan 1.
At the beginning of the year, AA prepared the Aging
of Accounts Receivable Schedule.
Complete the table.
Customer
Amount
Current
Number of Days Past Due
(Not...
Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible...
Direct Write-Off Method
Journalize the following transactions, using the direct
write-off method of accounting for uncollectible receivables:
Oct. 2: Received $2,250 from Matthew Chapman
and wrote off the remainder owed of $2,050 as uncollectible. If an
amount box does not require an entry, leave it blank.
Oct. 2
Dec. 20: Reinstated the account of Matthew
Chapman and received $2,050 cash in full payment.
Dec. 20-Reinstate
Dec. 20-Collection
Allowance Method
Journalize the following transactions, using the allowance
method of accounting for...
Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible...
Direct Write-Off Method
Journalize the following transactions, using the direct
write-off method of accounting for uncollectible receivables:
Oct. 2: Received $2,450 from William Pruitt and
wrote off the remainder owed of $2,330 as uncollectible. If an
amount box does not require an entry, leave it blank.
Oct. 2
Dec. 20: Reinstated the account of William
Pruitt and received $2,330 cash in full payment.
Dec. 20-Reinstate
Dec. 20-Collection
2.) Allowance Method
Journalize the following transactions, using the allowance
method of accounting...
Direct Write-Off Method Journalize the following transactions, using the direct write-off method of accounting for uncollectible...
Direct Write-Off Method
Journalize the following transactions, using the direct
write-off method of accounting for uncollectible receivables.
Oct. 2: Received $2,980 from Paula Spitler and
wrote off the remainder owed of $3,550 as uncollectible. If an
amount box does not require an entry, leave it blank.
Oct. 2
Dec. 20: Reinstated the account of Paula
Spitler and received $3,550 cash in full payment.
Reinstate
Collection
1. Explain how to record the recovery of an account previously written off when the direct...
1. Explain how to record the recovery of an account previously
written off when the direct write-off method was used.
2. Explain how to record the recovery of an account previously
written off when the allowance method was used.
3. Describe the financial statement presentation of both the
allowance for uncollectible accounts and the loss from
uncollectible accounts
Notes: •Direct write-off method: records bad debt expense only when an account is judged to be...
Notes:
•Direct write-off method: records bad debt expense only when
an account is judged to be worthless
•Allowance method: records bad debt expense by estimating
uncollectible accounts at the end of the accounting period
--On August 31, Target Inc. had an unadjusted credit balance of
$1,500 in its Allowance for Uncollectible Account. An analysis of
Target Inc.’s accounts receivables revealed the following: (Target
Inc. uses the aging of receivables method to estimate its bad debt
expense)
Age (days)
Amount ...
1. Under the allowance method, when a specific account is written off total assets will be...
1.
Under the allowance method, when a specific account is written
off
total assets will be unchanged.
net income will decrease.
total assets will increase.
total assets will decrease.
2.
Blossom Company uses the percentage of receivables method for
recording bad debts expense. The accounts receivable balance is
$310000 and credit sales are $3110000. Management estimates that 4%
of accounts receivable will be uncollectible. What adjusting entry
will Blossom Company make if the Allowance for Doubtful Accounts
has a credit...
Allowance Method versus Direct Write-Off Method On April 12, Maddox Company, declared a $40,000 account receivable...
Allowance Method versus Direct Write-Off Method
On April 12, Maddox Company, declared a $40,000 account receivable
from the Ward Company as uncollectible and wrote off the account.
On December 5, Maddox received a $28,000 payment on the account
from Ward.
a. Assume that Maddox uses the allowance method of handling
credit losses. Prepare the journal entries to record the write-off
and the subsequent recovery of Ward's account.<
b. Assume that Maddox uses the direct write-off method of handling
credit losses....
If a company uses the direct write off method of accounting for bad debts It will...
If a company uses the direct write off method of accounting for
bad debts
It will record bad debt expense only when an account is
determined to be uncollected
It will establish an estimate for the allowance for doubtful
debts
It will reduce the accounts receivable account at the end of
the accounting period for uncollected accounts
When an account is written off, total assets will stay the
same.
None of the above
Cost behaviour refers to:
Manufacturing overheads
Costs...
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