71.What is the type of account and normal balance of Allowance for Doubtful Accounts?
a.contra asset, credit
b.asset, debit
c.asset, credit
d.contra asset, debit
72.When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when
a.a customer's account becomes past due
b.an account becomes bad and is written off
c.a sale is made
d.management estimates the amount of uncollectibles
73.A debit balance in the Allowance for Doubtful Accounts
a.is the normal balance for that account
b.indicates that actual bad debt write-offs have been less than what was estimated
c.cannot occur if the percentage of receivables method of estimating bad debts is used
d.indicates that actual bad debt write-offs have exceeded previous provisions for bad debts
74.To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a
a.debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts
b.debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts
c.debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable
d.debit to Loss on Credit Sales and a credit to Accounts Receivable
75.Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts
a.liabilities decrease
b.net income is unchanged
c.total assets are unchanged
d.total assets decrease
76.Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is$390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of theoutstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance forDoubtful Accounts has a credit balance of $2,500 before adjustment?
a. Bad Debt Expense
Allowance for Doubtful Accounts
|
17,000
|
17,000
|
b. Bad Debt Expense
Allowance for Doubtful Accounts
|
19,500
|
19,500
|
c. Bad Debt Expense
Allowance for Doubtful Accounts
|
22,000
|
22,000
|
d. Bad Debt Expense
Allowance for Doubtful Accounts
|
65,000
|
65,000
|
77.You have just received notice that a customer of yours with an Account Receivable balance of $100 has gonebankrupt and will
notmake any future payments. Assuming you use the allowance method, the entry you make isto
a.debit Bad Debt Expense and credit Allowance for Doubtful Accounts
b.debit Bad Debt Expense and credit Accounts Receivable
c.debit Allowance for Doubtful Accounts and credit Accounts Receivable
d.debit Allowance for Doubtful Accounts and credit Bad Debt Expense
78.The balance in Allowance for Doubtful Accounts will directly impact the end-of-period adjustment for the bad debtexpense when using which of the following methods?
a.allowance method based on aging the receivables
b.direct write-off method
c.accrual method
d.declining value method
79.An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. IfAllowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for theperiod will require a
a.debit to Bad Debt Expense for $8,600
b.debit to Bad Debt Expense for $7,900
c.debit to Bad Debt Expense for $7,200
d.credit to Allowance for Doubtful Accounts for $700
80.An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400. IfAllowance for Doubtful Accounts has a $1,300 debit balance, the adjustment to record the bad debt expense for theperiod will require a
a.debit to Bad Debt Expense for $7,700
b.debit to Bad Debt Expense for $6,400
c.debit to Bad Debt expense for $5,100
d.credit to Allowance for Doubtful Accounts for $1,300