Answer:
B.
Explanation:
An uncollectible account or bad debt is an account receivable that the business cannot collect. Businesses account for bad debts by using
:
-the allowance method.
-the direct write-off method
.
The direct write-off method is primarily used by businesses with few credit customers. When it is determined that a customer is not going to pay, the uncollectible account is removed from the records.
To remove from the records, there is a credit to Accounts Receivable (asset account, increase by the debit) and a debit to Bad Debts Expense (expense account, increase by the debit).
Answer:
A) private companies, the government, self-employers, and organizations
Explanation:
Answer:
a. $50, $10
Explanation:
The accounting result would be explicit income and expenses:
60 sales and 10 cost of the ingridients = 50 dollar gain
While the economic result will also consider implicit cost. Which is the opportunity cost. This is the amount of revenue that could be generated for the factor in other alternative.
In this case we have a 50 dollar gain less the 40 dollar we coudl have earned doing the other job the economic gain is 10 dollars
Answer:
- 1-a. Complete the Accounts Receivable and Allowance for Doubtful Accounts T-accounts to determine the balance sheet values. Disregard income tax considerations.
Accounts Rec T-Account
$ 306.673 Debit
$ 290.750 Credit
$ 7.059 Credit
$ 8.864 Debit Balance
Allowance for Doubtful Accounts T-Account
$ 7.059 Debit
$ 4.775 Credit
$ 2.284 Debit Balance
- 1-b. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the income statement for the current year.
$ 4.775 Dr Bad Debt Expense
- 1-c. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the balance sheet for the current year.
$ 2.284 Dr (Debit) Allowance for Uncollectible Accounts
$ 8.864 Dr (Debit) Accounts Receivable
Explanation:
Dr Accounts Receivable $ 306.673
Cash $ 290.750
Cr Accounts Receivable $ 290.750
Dr Allowance for Uncollectible Accounts $ 7.059
Cr Accounts Receivable $ 7.059
- Bad debt expense adjustment
Dr Bad Debt Expense $ 4.775
Cr Allowance for Uncollectible Accounts $ 4.775
- 1-b. Complete the amounts related to Accounts Receivable and
Bad Debt Expense that would be reported on the INCOME STATEMENT for the current year
Dr Bad Debt Expense $ 4.775
- 1-c. Complete the amounts related to Accounts Receivable and
Bad Debt Expense that would be reported on the BALANCE SHEET for the current year.
Dr Allowance for Uncollectible Accounts $ 2.284
Dr Accounts Receivable $ 8.864