197.Uncollectible accounts(a.) What is an uncollectible account? Explain how a business suffers losses from uncollectible accounts.(b.) "A competent credit manager should set credit policies so as to...

197.Uncollectible accounts


(a.) What is an uncollectible account? Explain how a business suffers losses from uncollectible accounts.
(b.) "A competent credit manager should set credit policies so as to avoid any and all losses from uncollectible accounts." Is this statement accurate? Explain your answer.

198.Balance sheet method-journal entries


The general ledger controlling account for Accounts Receivable has a balance of $120,500 at year-end before adjustment. The company uses the balance sheet approach to estimate uncollectible accounts. By aging the individual customers' accounts, it was determined that the doubtful accounts amounted to $5,020. Prepare the year-end adjusting entry for uncollectible accounts under each of the following independent assumptions.


(a.) Allowance for Doubtful Accounts has a
credit
balance of $2,850.
(b.) Allowance for Doubtful Accounts has a
debit
balance of $925.