acct 3 exam
When the direct write-off method of recognizing bad debt expense is used, the entry to write off a specific customer account would:
Decrease the accounts receivable balance and decrease net income
Interest Revenue on a note receivable is classified on the
Income statement under other revenues
Accounts receivable should be reported on the balance sheet as the amount due from customers (that is, the balance in the Accounts Receivable account):
less the balance in the Allowance for Doubtful Accounts account
The book value of an asset is the:
Acquisition cost of the asset less any accumulated depreciation on the asset
The adjusting entry to record uncollectible accounts expense under the allowance method would include a credit to
Allowance for Doubtful Accounts
An expenditure for the repair of an asset must be capitalized if it:
Benefits the company over several periods
The entry to write off a specific uncollectible account under the allowance method will include a credit to
act receive
the book value of an asset is equal to the
assets cost less than accumulated depreciation
Using the allowance method, writing off an actual bad debt (customer doesn't pay) account would include:
cr Accounts Receivable
Most companies pay current liabilities
out of current assets.
Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited
when an account is determined to be uncollectible.