Need Answer correctly Under what circumstances does trade discount affectthe accounting records?a) Appears as reduction in salesb) Shows as contra revenue accountc) Never recorded - only net amount is journalizedd) Recorded as financial expense

Step 1:There are two types of discount Trade discount Cash discount Trade discount is the discount…

Answered: Under what circumstances does trade…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter14: Accounting For Uncollectible Accounts Receivable

Section14.1: Uncollectible Accounts Receivable

Problem 2AYU

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Which of the following accounts are characterized as a "contra" account? (Select ALL that apply) O Equipment O Deferred Revenue OAccumulated Depreciation O Accounts Payable O Depreciation Expense O Sales Allowances O Sales return O Allowance for Uncollectible A/R O Bad Debt Expense O Accounts Receivable O Notes Payable O Cost of Goods Sold ASUS
Bad debt expense is normally reported on the income statement as a(n) a. Operating expense b. Offset agaisnt gross c. Financial expense in the order items section d. Contra-revenue amount
Which of the following accounts is an example of a contra-asset?A) Cost of Goods Sold B)Sales Discounts C) Purchases D) Deferred Revenue E) LIFO Reserve
Using the allowance method, is Bad Debt Expense recognized in the period in which ( a ) sales related to the uncollectible account were made or ( b ) the seller learns that thecustomer is unable to pay?
How are gain contigencies reported in the financial statements? a. a contingent account receivable b. an accrued revenue c. a deferred revenue d. not at all
The entry to write off an account receivable under the allowance method willT ( A. increase total assets O B. increase net income C. reduce net income D. have no effect on net income)
Indicate whether each statement best describes the allowance (A) method or the direct write-off (DW)method. Estimates bad debts expense related to the sales recorded in that period.
Indicate by a (+), (), or (0) whether each of the following events would most likely cause accounts receivable (AR), sales, and profits to increase, decrease, or be affected in an indeterminate manner:
Which method delays recognition of bad debt until the specific customer accounts receivable is identified? A. income statement method B. balance sheet method C. direct write-off method D. allowance method
Under the allowance method for uncollectible receivables, the entry to record uncollectible-account expense has what effect on the financial statements?a. Decreases assets and has no effect on net incomeb. Increases expenses and increases stockholders’ equityc. Decreases net income and decreases assetsd. Decreases stockholders’ equity and increases liabilities
The Sales Discounts Forfeited account ________. A. is a balance sheet account B. represents additional sales revenue C. represents additional revenue due to the customer not paying within the discount period D. is a contra Sales Revenue account

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Under what circumstances does trade discount affect the accounting records? a) Appears as reduction in sales b) Shows as contra revenue account c) Never recorded - only net amount is journalized d) Recorded as financial expense