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29. When an uncollectible account is written off under the estimated bad debts method, it a. Decrease net income b. Increases working capital c. Increases the accounts receivable net realizable value d. Leave total assets unchanged

29. When an uncollectible account is written off under the estimated bad debts method, it a. Decrease net income b. Increases working capital c. Increases the accounts receivable net realizable value d. Leave total assets unchanged

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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28. When aging of accounts receivable is used, each age group is multiplied by its own estimated uncollectible percentage to determine each age group's estimated uncollectible amount. The sum of th amounts thus determined: a. Is the bad debt expense for the year b. Is the estimated balance for the allowance for doubtful accounts at year-end c. Is the amount added to the existing crodit balance in the allowance account to determine the bad debt expense for the year. d. Is the amount that should be written off as uncollectible for the year 29. When an uncollectible account is written off under the estimated bad debts method, it a Decrease net income b. Increases working capital c. Increases the accounts receivable net realizable value d. Leave total assets unchanged 30. When a company writes off an account receivable using the direct write-off method, the effect of this write-off on the financial statements is to a. Increase the net realizable value of accounts receivable b. Reduce total expenses c. Reduce total assets d. Increase working capital 31. When a company writes off an account receivablo using the direct write-off method, the effect of this write-off on the financial statements is to a Increase the net realizable value of accounts receivable b. Reduce total expenses c. Reduce total assets d. Increase working capital 32. Why would a company sell receivables to another company?
Transcribed Image Text:28. When aging of accounts receivable is used, each age group is multiplied by its own estimated uncollectible percentage to determine each age group's estimated uncollectible amount. The sum of th amounts thus determined: a. Is the bad debt expense for the year b. Is the estimated balance for the allowance for doubtful accounts at year-end c. Is the amount added to the existing crodit balance in the allowance account to determine the bad debt expense for the year. d. Is the amount that should be written off as uncollectible for the year 29. When an uncollectible account is written off under the estimated bad debts method, it a Decrease net income b. Increases working capital c. Increases the accounts receivable net realizable value d. Leave total assets unchanged 30. When a company writes off an account receivable using the direct write-off method, the effect of this write-off on the financial statements is to a. Increase the net realizable value of accounts receivable b. Reduce total expenses c. Reduce total assets d. Increase working capital 31. When a company writes off an account receivablo using the direct write-off method, the effect of this write-off on the financial statements is to a Increase the net realizable value of accounts receivable b. Reduce total expenses c. Reduce total assets d. Increase working capital 32. Why would a company sell receivables to another company?
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