Direct Write-off of Accounts Receivable (not allowed by GA Acme, Inc's Accounts Receivable balance is $10,000 as of December 31. Customer Ledger: 3,000 700 2,300 4,000 10,000 Sue Fred Mary Bob Total Fred goes bankrupt in January and will not pay. His Accounts Receivable balance needs to be removed from Acme's records. Journalize the removed of the account. GENERAL JOURNAL Page Date Description Post Debit Credit ref 1 1 Analysis: When was the revenue from the sale to Fred recognized on Acme's financials? When is the bad debt expense recognized? What Accounting Principle is being violated by the Direct Write-off method?
Direct Write-off of Accounts Receivable (not allowed by GA Acme, Inc's Accounts Receivable balance is $10,000 as of December 31. Customer Ledger: 3,000 700 2,300 4,000 10,000 Sue Fred Mary Bob Total Fred goes bankrupt in January and will not pay. His Accounts Receivable balance needs to be removed from Acme's records. Journalize the removed of the account. GENERAL JOURNAL Page Date Description Post Debit Credit ref 1 1 Analysis: When was the revenue from the sale to Fred recognized on Acme's financials? When is the bad debt expense recognized? What Accounting Principle is being violated by the Direct Write-off method?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Also answer the Analysis please
Transcribed Image Text:Direct Write-off of Accounts Receivable (not allowed by GAAP)
Acme, Inc's Accounts Receivable balance is $10,000 as of December 31.
Customer Ledger:
3,000
700
Sue
Fred
Mary
Bob
Total
2,300
4,000
10,000
Fred goes bankrupt in January and will not pay. His Accounts Receivable balance needs to be removed from
Acme's records. Journalize the removed of the account.
GENERAL JOURNAL
Page
Date
Description
Post
Debit
Credit
ref
1
1
Analysis:
When was the revenue from the sale to Fred recognized on Acme's financials?
When is the bad debt expense recognized?
What Accounting Principle is being violated by the Direct Write-off method?
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