Register
Using the allowance method, Bad Debt Expense is recorded _____. a. as an estimate in the period of the related credit sales b. when the company defaults on its Notes Payable c. when the specific customer
409,784 views
2 votes
2 votes
Using the allowance method, Bad Debt Expense is recorded _____.

a. as an estimate in the period of the related credit sales
b. when the company defaults on its Notes Payable
c. when the specific customer is known to be uncollectible
d. when a company writes off its uncollectible receivables

User Sahil Kapoor
by
2.8k points

1 Answer

12 votes
12 votes

Final answer:

Bad Debt Expense is recorded as an estimate in the period of the related credit sales.

Step-by-step explanation:

The correct answer is a. as an estimate in the period of the related credit sales. The allowance method is used to estimate and record Bad Debt Expense, which represents the amount of accounts receivable that is unlikely to be collected. It is recorded in the same accounting period as the related credit sales, based on an estimate of the percentage of credit sales that will become uncollectible.

User Elfisher
by
3.1k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
If you buy a one-year bond for $4,000 and the issuer pays you back $5,000 at the end of one year, the interest rate on the bond is
The market value of the equity of Hudgins, Inc., is $582,000. The balance sheet shows $21,000 in cash and $192,000 in debt, while the income statement has EBIT of $93,000 and a total of $137,000 in depreciation
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that Group of answer choices bond interest is deductible for tax purposes. interest must be
Link Copied!