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8. Judie Co. provided $15,000 of social media consulting services to Soren Enterprises 2 years ago and Soren Enterprises has still not paid. Judie Co. properly recorded these services as revenues on account at the time that the services were provided. Today, Judie Co. has received a notice that Soren Enterprises has filed for bankruptcy and the value of its outstanding assets is not sufficient to cover its obligation to Judie Co. In other words, Judie Co. now knows that Soren Enterprises will not pay the balance of their account. What is part of the correct journal entry that Judie Co. should record at the time that it receives the notice of Soren Enterprises' bankruptcy? a. DEBIT to Bad Debt Expense of $15,000 b. DEBIT to Write-offs of $15,000 c. DEBIT to Allowance for Doubtful Accounts of $15,000 d. DEBIT to Accounts Receivable of $15,000 e. No journal entry necessary. Because Judie Co. uses the Allowance Method, write-offs have already been accounted for in adjusting entries made at the end of each accounting period. 9. Use the information provided in Problem 8. The correct journal entry to record the write-off of Soren's account leads Net Accounts Receivable to: a. Increase b. Decrease c. Remain unchanged

8. Judie Co. provided $15,000 of social media consulting services to Soren Enterprises 2 years ago and Soren Enterprises has still not paid. Judie Co. properly recorded these services as revenues on account at the time that the services were provided. Today, Judie Co. has received a notice that Soren Enterprises has filed for bankruptcy and the value of its outstanding assets is not sufficient to cover its obligation to Judie Co. In other words, Judie Co. now knows that Soren Enterprises will not pay the balance of their account. What is part of the correct journal entry that Judie Co. should record at the time that it receives the notice of Soren Enterprises' bankruptcy? a. DEBIT to Bad Debt Expense of $15,000 b. DEBIT to Write-offs of $15,000 c. DEBIT to Allowance for Doubtful Accounts of $15,000 d. DEBIT to Accounts Receivable of $15,000 e. No journal entry necessary. Because Judie Co. uses the Allowance Method, write-offs have already been accounted for in adjusting entries made at the end of each accounting period. 9. Use the information provided in Problem 8. The correct journal entry to record the write-off of Soren's account leads Net Accounts Receivable to: a. Increase b. Decrease c. Remain 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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8. Judie Co. provided $15,000 of social media consulting services to Soren Enterprises 2 years ago and Soren Enterprises has still not paid. Judie Co. properly recorded these services as revenues on account at the time that the services were provided. Today, Judie Co. has received a notice that Soren Enterprises has filed for bankruptcy and the value of its outstanding assets is not sufficient to cover its obligation to Judie Co. In other words, Judie Co. now knows that Soren Enterprises will not pay the balance of their account. What is part of the correct journal entry that Judie Co. should record at the time that it receives the notice of Soren Enterprises' bankruptcy? a. DEBIT to Bad Debt Expense of $15,000 b. DEBIT to Write-offs of $15,000 c. DEBIT to Allowance for Doubtful Accounts of $15,000 d. DEBIT to Accounts Receivable of $15,000 e. No journal entry necessary. Because Judie Co. uses the Allowance Method, write-offs have already been accounted for in adjusting entries made at the end of each accounting period. 9. Use the information provided in Problem 8. The correct journal entry to record the write-off of Soren's account leads Net Accounts Receivable to: a. Increase b. Decrease c. Remain unchanged
Transcribed Image Text:8. Judie Co. provided $15,000 of social media consulting services to Soren Enterprises 2 years ago and Soren Enterprises has still not paid. Judie Co. properly recorded these services as revenues on account at the time that the services were provided. Today, Judie Co. has received a notice that Soren Enterprises has filed for bankruptcy and the value of its outstanding assets is not sufficient to cover its obligation to Judie Co. In other words, Judie Co. now knows that Soren Enterprises will not pay the balance of their account. What is part of the correct journal entry that Judie Co. should record at the time that it receives the notice of Soren Enterprises' bankruptcy? a. DEBIT to Bad Debt Expense of $15,000 b. DEBIT to Write-offs of $15,000 c. DEBIT to Allowance for Doubtful Accounts of $15,000 d. DEBIT to Accounts Receivable of $15,000 e. No journal entry necessary. Because Judie Co. uses the Allowance Method, write-offs have already been accounted for in adjusting entries made at the end of each accounting period. 9. Use the information provided in Problem 8. The correct journal entry to record the write-off of Soren's account leads Net Accounts Receivable to: a. Increase b. Decrease c. Remain unchanged
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