Ch. 8
Which of the following are contra-asset accounts?
Accumulated Depreciation Allowance for Doubtful Accounts
Which method requires estimating the amount of the Bad Debt Expense and then determining the balance in the Allowance for Doubtful Accounts which will differ from the expense if there is an unadjusted balance?
Percentage of credit sales method
Sales on account will cause an increase in
Sales Revenue on the income statement Accounts Receivable on the balance sheet
he adjusting entry to record the estimated amount of bad credit sales is a debit to Bad Debt Expense and a credit to
allowance for doubtful accounts
The adjusting entry to record the allowance for doubtful accounts causes total
assets to decrease stockholders' equity to decrease
An objective of the expense recognition (matching) principle is to have bad debt expense debited in
the same period the related credit sales are recorded
Which of the following is recorded at the end of an accounting period when accounting for receivables using the allowance method?
An estimate is recorded by debiting Bad Debt Expense and crediting Allowance for Doubtful Account in the same period as the related sale.
The adjusting entry to record the allowance for doubtful accounts includes a
credit to Allowance for Doubtful Accounts debit to Bad Debt Expense
When using the allowance method, the adjusting entry to record estimated bad debt expense includes a
credit to Allowance for Doubtful Accounts debit to Bad Debt Expense
When recording the adjusting entry for uncollectible accounts using the allowance method, customers' subsidiary accounts are not directly reduced. The reason is
the amounts are estimates and no one knows which particular customers will not pay the company would lose track of which customers still owe money
To be in accordance with GAAP, companies are required to estimate the amount of uncollectible receivables and make an adjusting entry. The effect of the adjusting entry is to ______.
reduce Net Income by debiting Bad Debt Expense and reduce net accounts receivable by crediting Allowance for Doubtful Accounts