Seasons Hospital uses the allowance method to account for its uncollectible accounts. It has the following balances on December 31 before any adjusting entries: Accounts Receivable = $100,000 Allowance for Uncollectible Accounts = $1,000 (credit) The hospital estimates uncollectible accounts to be 25% of accounts receivable. What year-end adjustment (adjusting entry) should be made for uncollectible accounts? Multiple Choice Account Bad Debt Expense Allowance for Uncollectible Accounts Account Bad Debt Expense Allowance for Uncollectible Accounts Account Allowance for Uncollectible Accounts Bad Debt Expense Account Bad Debt Expense Accounts Receivable Debit 25,000 Debit 24,000 Debit 24,000 Debit 25,000 Credit 25,000 Credit 24,000 Credit 24,000 Credit 25,000
Seasons Hospital uses the allowance method to account for its uncollectible accounts. It has the following balances on December 31 before any adjusting entries: Accounts Receivable = $100,000 Allowance for Uncollectible Accounts = $1,000 (credit) The hospital estimates uncollectible accounts to be 25% of accounts receivable. What year-end adjustment (adjusting entry) should be made for uncollectible accounts? Multiple Choice Account Bad Debt Expense Allowance for Uncollectible Accounts Account Bad Debt Expense Allowance for Uncollectible Accounts Account Allowance for Uncollectible Accounts Bad Debt Expense Account Bad Debt Expense Accounts Receivable Debit 25,000 Debit 24,000 Debit 24,000 Debit 25,000 Credit 25,000 Credit 24,000 Credit 24,000 Credit 25,000
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.
Question
7
Transcribed Image Text:Seasons Hospital uses the allowance method to account for its uncollectible accounts. It has the
following balances on December 31 before any adjusting entries:
Accounts Receivable = $100,000
Allowance for Uncollectible Accounts = $1,000 (credit)
The hospital estimates uncollectible accounts to be 25% of accounts receivable.
What year-end adjustment (adjusting entry) should be made for uncollectible accounts?
Multiple Choice
Account
Bad Debt Expense
Allowance for Uncollectible Accounts
Account
Bad Debt Expense
Allowance for Uncollectible Accounts
Account
Allowance for Uncollectible Accounts
Bad Debt Expense
Account
Bad Debt Expense
Accounts Receivable
Debit
25,000
Debit
24,000
Debit
24,000
Debit
25,000
Credit
25,000
Credit
24,000
Credit
24,000
Credit
25,000
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