CONNECT CODE F/FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260685978
Author: PHILLIPS
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Chapter 8, Problem 9ME
Recording Bad Debt Estimates Using the Two Estimation Methods
Using the information in M8-7 and M8-8, prepare the
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Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method?
a.To estimate the amount of bad debt expense based on an aging of accounts receivable.
b.To estimate bad debt expense based on a percentage of credit sales made during the period.
c.To determine the amount of uncollectible accounts during a given period.
d.To facilitate the use of the direct write-off method.
A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:
A. Direct write-off method.B. Aging of accounts receivable method.C. Percentage of sales method.D. Aging of investments method.E. Percent of accounts receivable method.
Which of the followings concepts relates to using the allowances method in accounting for accounts receivable?
A) Bad debt expense is an estimates that is based on historical and prospective information.
B) Bad debt expense is based on the actual amounts determined to be uncollectible.
C) Bads debt expense is an estimate that is based only on an analysis of the receivables aging.
D) Bad debt expense is managments determination of which accounts will be sent to the attorney for collection.
Chapter 8 Solutions
CONNECT CODE F/FINANCIAL ACCOUNTING
Ch. 8 - What are the advantages and disadvantages of...Ch. 8 - Prob. 2QCh. 8 - Which basic accounting principles does the...Ch. 8 - Using the allowance method, is Bad Debt Expense...Ch. 8 - What is the effect of the write-off of...Ch. 8 - How does the use of calculated estimates differ...Ch. 8 - A local phone company had a customer who rang up...Ch. 8 - What is the primary difference between accounts...Ch. 8 - What are the three components of the interest...Ch. 8 - As of May 1, 2016, Krispy Kreme Doughnuts had...
Ch. 8 - Does an increase in the receivables turnover ratio...Ch. 8 - What two approaches can managers take to speed up...Ch. 8 - When customers experience economic difficulties,...Ch. 8 - (Supplement 8A) Describe how (and when) the direct...Ch. 8 - (Supplement 8A) Refer to question 7. What amounts...Ch. 8 - 1. When a company using the allowance method...Ch. 8 - 2. When using the allowance method, as Bad Debt...Ch. 8 - 3. For many years, Carefree Company has estimated...Ch. 8 - 4. Which of the following best describes the...Ch. 8 - 5. If the Allowance for Doubtful Accounts opened...Ch. 8 - 6. When an account receivable is recovered a....Ch. 8 - Prob. 7MCCh. 8 - 8. If the receivables turnover ratio decreased...Ch. 8 - Prob. 9MCCh. 8 - Prob. 10MCCh. 8 - Prob. 1MECh. 8 - Evaluating the Decision to Extend Credit Last...Ch. 8 - Reporting Accounts Receivable and Recording...Ch. 8 - Recording Recoveries Using the Allowance Method...Ch. 8 - Recording Write-Offs and Bad Debt Expense Using...Ch. 8 - Determining Financial Statement Effects of...Ch. 8 - Estimating Bad Debts Using the Percentage of...Ch. 8 - Estimating Bad Debts Using the Aging Method Assume...Ch. 8 - Recording Bad Debt Estimates Using the Two...Ch. 8 - Prob. 10MECh. 8 - Prob. 11MECh. 8 - Recording Note Receivable Transactions RecRoom...Ch. 8 - Prob. 13MECh. 8 - Determining the Effects of Credit Policy Changes...Ch. 8 - Prob. 15MECh. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Bad Debt Expense Estimates and...Ch. 8 - Determining Financial Statement Effects of Bad...Ch. 8 - Prob. 3ECh. 8 - Recording Write-Offs and Recoveries Prior to...Ch. 8 - Prob. 5ECh. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Recording and Reporting Allowance for Doubtful...Ch. 8 - Recording and Determining the Effects of Write-Off...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Using Financial Statement Disclosures to Infer...Ch. 8 - Using Financial Statement Disclosures to Infer Bad...Ch. 8 - Prob. 15ECh. 8 - Analyzing and Interpreting Receivables Turnover...Ch. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions Jung ...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions CS...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 2PBCh. 8 - Prob. 3PBCh. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording and Reporting Credit Sales and Bad Debts...Ch. 8 - Prob. 2COPCh. 8 - Recording Daily and Adjusting Entries Using FIFO...Ch. 8 - Prob. 1SDCCh. 8 - Prob. 2SDCCh. 8 - Ethical Decision Making: A Real-Life Example You...Ch. 8 - Critical Thinking: Analyzing the Impact of Credit...Ch. 8 - Using an Aging Schedule to Estimate Bad Debts and...Ch. 8 - Accounting for Receivables and Uncollectible...
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- Which of the following statements is true regarding the two allowance procedures used to estimate bad debts? Oa. The percentage of net credit sales method takes into account the existing balance in the Allowance for Doubtful Accounts account. Ob. The aging of accounts receivable method takes into account the existing balance in the Allowance for Doubtful Accounis account. Oc, The direct write-off method does a better job of matching revenues and expenses. Od. The direct write-off method takes into account the existing balance in the Allowance for Doubtful Accounts account.arrow_forwardWhich of the option is correct for the question provided?arrow_forwardWhich of the following concepts relates to using the allowance method in accounting for accounts receivable? Bad debt expense is management's determination of which accounts will be sent to the attorney for collection. а. O b. Bad debt expense is an estimate that is based on historical and prospective information. Ос. Bad debt expense is an estimate that is based only on an analysis of the receivables ageing. O d. Bad debt expense is based on the actual amounts determined to be uncollectible.arrow_forward
- Which of the following methods of estimating bad debts expense considers the length of time past due for the outstanding accounts: a. Percentage of sales method b. Percent of accounts receivable method c. Aging of investments method d. Aging of accounts receivable methodarrow_forwardWhich of the following statements regarding the allowance method is talse? Multiple Choice The allowance method estimates bad debts expense at the end of each accounting period and records it w The allowance method does not record bad debt expense until a customer's account receivable is determirarrow_forwardIndicate 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.arrow_forward
- When using the percentage of sales method to estimate the amount of bad debt expense for uncollectible accounts, what effect would a debit balance in Allowance for Doubtful Accounts have on the current period's adjusting entry? a.A debit balance would increase the amount of the current period's adjusting entry. b.A debit balance would decrease the amount of the current period's adjusting entry. c.The balance in Allowance for Doubtful Accounts would be ignored when making the current period's adjusting entry. d.A debit balance would be carried over to the next period.arrow_forwardCompare and contrast the direct write-off method and the allowance method for bad debts. At a minimum, please consider the following in your answer: When is the expense for uncollected accounts receivable recognized under each method? Why is the direct write-off method not considered to follow generally accepted accountingarrow_forwardiedugen.wileyplus. Return to Blackboard Weygandt, Accounting Principles, 13th Edition, Custom WileyPLUS Course for Bronx Community College Help | System Announcements CALCULATOR PRINTER VERSION ( BACK NEXT Exercise 9-04 a-f (Part Level Submission) At the beginning of the current period, Cheyenne had balances in Accounts Receivable of $286,000 and in Allowance for Doubtful Accounts of $9,900 (credit). During the period, it had net credit sales of $890,000 and collections of $845,500. It wrote off as uncollectible accounts receivable of $6,000. However, a $4,000 account previously written off as uncollectible was recovered before the end of the current period. Uncollectible accounts are estimated to total $24,800 at the end of the period. (Omit cost of goods sold entries.) (a - d) Your answer has been saved and sent for grading. See Gradebook for score details. (a) Prepare the entries to record sales and collections during the period. (b) Prepare the entry to record the write-off of…arrow_forward
- What is the normal journal entry for recording bad debt expense under the allowance method? a. Debit Accounts Receivable, credit Allowance for Doubtful Accounts. 1. b. Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. C. d. Debit Allowance for Doubtful Accounts, credit Accounts Receivable. Explain the answer you selected: 2. Under the allowance method of recognizing uncollectible accounts, the entry to write off an uncollectible account а. has no effect on net income b. decreases net income c. increases the allowance for uncollectible accounts d. has no effect on the allowance for uncollectible accounts Explain the answer you selected:arrow_forwardThere are two approaches to implementing the allowance method of recognizing bad debt – Percentage of Net Sales and Accounts Receivable Aging Method. Requirements: What accounting principle requires the use of the allowance method for recognizing bad debt? Compare and contrast the two methods identified above. Discuss the philosophical differences between them and identify the one that is more accurate and why.arrow_forwardi need the answer quicklyarrow_forward
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