1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mina [271]
3 years ago
9

On June 20 of the prior year, a company determined that a customer's account receivable was uncollectible and that the account s

hould be written off. Unexpectedly, on September 1 of the current year, the customer paid the account in full. Assuming the allowance method is used to account for bad debts, what effect will this recovery have on the company's net income and total assets?
A. No effect on net income; decrease in total assets
B. No effect on net income; no effect on total assets (chosen answer)
C. Increase in net income; no effect on total assets
D. Decrease in net income; no effect on total assets
E. Decrease in net income; decrease in total assets
Business
1 answer:
fomenos3 years ago
5 0

Answer:

B. No effect on net income; no effect on total assets

Explanation:

When you write off bad debt, the journal entry is:

Dr Allowance for doubtful accounts XYZ

    Cr Accounts receivable XYZ

This actually had no effect on the income statement, since the allowance account is already a contra asset account.

When the write off is reversed because the customer paid the debt, the journal entry is:

Dr Accounts receivable XYZ

    Cr Allowance for doubtful accounts XYZ

Dr Cash XYZ

    Cr Accounts receivable XYZ

Again, since the company is using the allowance method, there is no real effect on the income statement nor total assets in the balance sheet.

You might be interested in
The menu of substantive actions top managers can take to change a problem company culture does not include
Helen [10]

Complete Question:

The menu of substantive actions top managers can take to change a problem company culture does not include which one of the following?

a) screening all candidates for new positions carefully, hiring only those who appear to fit in with the new culture

b) shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change

c) promoting individuals who are known to possess the desired cultural traits, who have stepped forward to advocate the shift to a different culture, and who can serve as role models for the desired cultural behavior

d) revising policies and procedures in ways that will help drive cultural change

e) replacing high-profile executives and managers who are strongly associated with the old culture and are opposing or stonewalling needed organizational and cultural changes

Answer:

b) shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change

Explanation:

The menu of substantive actions top managers can take to change a problem company culture does not include shifting from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change.

5 0
3 years ago
your _______ should furnish enough money to live on, in an emergency, for six months. a. interest b. investments c. ira d. savin
mezya [45]
D) savings - you should always have a 'buffer' to ensure that should the worst happen you have 'thinking time' to adapt your lifestyle.
6 0
3 years ago
Ajax, Inc., issued callable bonds with a par value of $1,000,000 that require the payment of a call premium of $10,000. The bond
almond37 [142]

Answer:

bonds payable       1,000,000 debit

loss on redemption    20,000 debit

        discount on bonds               10,000 credit

        cash                                  1,010,000 credit

--to record tyhe call of the bonds on September 30th--

Explanation:

par value of the bonds:    1,000,000

call premium:                   <u>       10,000</u>

total cash disbusements:  1,010,000

carrying value                      990,000

loss on redemption               20,000

<u>Notice: </u>It is a loss as we are paying more than the aliability is worth

discount/premium:

face value     1,000,000

carrying value 990,000

discount             10,000

We write off the bonds account: bond payable and bon discount

we debit the loss and credit hthe cash disbursments

8 0
3 years ago
A private university offers graduate assistantships to qualified students each year. In exchange for the waiver oftuition, gradu
alina1380 [7]

Answer:

A. tuition revenues of $4,000 and expenditures of $4,000.

Explanation:

If the student is not employed as a graduate assistant required to assist faculty members with research and other activities, we will have one:

a. The student will have to pay $4,000 tuition. This is a revenue to the university.

b. The private university will employ a research assistant and pay him $4,000. This an expenditure to the university.

Therefore, this transactions have to be required as highlighted in a. and b. above to track the actual revenue and expenditure implication of the waiver despite cash does not exchange hands.

7 0
3 years ago
Once the root causes of performance gaps have been discovered, it is necessary to: ____________
AleksandrR [38]

Answer:

A

Explanation:

8 0
3 years ago
Other questions:
  • (a) Does Honest Tea have more of an organic or mechanistic structure?
    7·1 answer
  • g Suppose on January 1 Austin​'s Tavern prepaid rent of $ 13 comma 200 for the full year. At May 31​, how much rent expense shou
    11·1 answer
  • Select which part of the expenditures approach of calculating the GDP is being described:
    12·1 answer
  • To measure ingredients accurately, it is best to measure items in as many
    10·2 answers
  • The extra expense incurred by a business to stay in operation following a fire is an example of a(n)
    8·1 answer
  • Select all the words that are associated with Demand
    10·1 answer
  • Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35,000 cash and accounts receivable of $30,000
    10·1 answer
  • In one ancient civilization, hunters shared fresh meat with other individuals in a group without an explicit timeframe or agreem
    13·1 answer
  • What makes sure that the aesthetic and functional aspects of the button work in the context of the rest of the product
    5·1 answer
  • When firms face reduced demand for their goods and services during recessions, behavioral economics suggests that the firm shoul
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!