Answer:
b. A deduction from net income in determining cash flows from operating activities.
Explanation:
An increase in prepaid expenses is deducted from Net Income. The reason behind it very simple and no rocket science is there. Lets take Insurance as a prepaid expense. You Paid in-advance for Insurance, it increase your current asset that is Prepaid Insurance BUT at the same time cash went out of the Business.
I hope I made it clear to you. If you still have any queries, feel free to ask me.
Thanks!
Answer:
debit to Bad Debt Expense for $5800
Explanation:
Accounts receivable estimated as uncollectible = $8500
Allowance for Doubtful Accounts = $2700
Additional allowance for Doubtful debts required = $8500 - $2700
= $5800
The adjustment to record bad debts for the period will be
Debit Bad debt expense $5800
Credit Allowance for Doubtful Accounts $5800
The right option is debit to Bad Debt Expense for $5800
212.24 would be your answer. 12.24 is just how much he makes off interest, not the total amount. 200 is what he started with. And 400 is just way to high of a number.
The answer that I choose was false