י Plankton Ltd deals in ceramic pots and figurines. All sales are conducted on a credit basis and no cash discounts are given. Ignore GST. The following Time left 1:21:05 information was extracted from the accounting records at 30 June 2023: Credit Sales Sales returns and allowances Cash collected $ 552,000 37,900 Debts to be written off Allowance for Doubtful Debts 1 July 2022 319.120 4,022 2,645 Cr Assume that Plankton Ltd uses the direct write-off method of accounting for bad debts. What would the general journal entry be to write off the bad debt? Select one: O a. Dr Bad debts expense $4,022; Credit Allowance for doubtful debts O b. Dr Bad debts expense $1,377; Credit Allowance for doubtful debts $1,377 O c. Dr Bad debts expense $4,022; Credit Accounts receivable $4,022 O d. Dr Bad debts expense $1,377; Credit Accounts receivable $1,377 O e. None of the above 0
י Plankton Ltd deals in ceramic pots and figurines. All sales are conducted on a credit basis and no cash discounts are given. Ignore GST. The following Time left 1:21:05 information was extracted from the accounting records at 30 June 2023: Credit Sales Sales returns and allowances Cash collected $ 552,000 37,900 Debts to be written off Allowance for Doubtful Debts 1 July 2022 319.120 4,022 2,645 Cr Assume that Plankton Ltd uses the direct write-off method of accounting for bad debts. What would the general journal entry be to write off the bad debt? Select one: O a. Dr Bad debts expense $4,022; Credit Allowance for doubtful debts O b. Dr Bad debts expense $1,377; Credit Allowance for doubtful debts $1,377 O c. Dr Bad debts expense $4,022; Credit Accounts receivable $4,022 O d. Dr Bad debts expense $1,377; Credit Accounts receivable $1,377 O e. None of the above 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:י
Plankton Ltd deals in ceramic pots and figurines. All sales are conducted on a credit basis and no cash discounts are given. Ignore GST. The following
Time left 1:21:05
information was extracted from the accounting records at 30 June 2023:
Credit Sales
Sales returns and allowances
Cash collected
$
552,000
37,900
Debts to be written off
Allowance for Doubtful Debts 1 July 2022
319.120
4,022
2,645 Cr
Assume that Plankton Ltd uses the direct write-off method of accounting for bad debts. What would the general journal entry be to write off the
bad debt?
Select one:
O a. Dr Bad debts expense $4,022; Credit Allowance for doubtful debts
O b. Dr Bad debts expense $1,377; Credit Allowance for doubtful debts $1,377
O c.
Dr Bad debts expense $4,022; Credit Accounts receivable $4,022
O d. Dr Bad debts expense $1,377; Credit Accounts receivable $1,377
O e. None of the above
0
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