A company has $107,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 5% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is a(n) $970 debit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:
A. $4380
B. $6320
C. $5350
D. $970
E. None of these is correct.
Answer: B
You might also like to view...
Which of the following would notbe classified as an operating activity?
a. interest expense b. income taxes c. payment of dividends d. selling expenses
The aggregate of all elements, sharing some common set of characteristics, which comprises the universe for the purpose of the marketing research problem, is called the sample
Indicate whether the statement is true or false
Some analysts calculate the inventory turnover ratio by dividing sales, rather than cost of goods sold, by the average inventory. Which of the following regarding the inventory turnover ratio is/are not true?
a. Using sales in the numerator, will lead to incorrect measures of the inventory turnover ratio for calculating the average number of days that inventory is on hand until sale. b. As long as the ratio of selling price to cost of goods sold remains relatively constant, either measure will identify changes in the trend of the inventory turnover ratio. c. Using sales in the numerator, will lead to correct measures of the inventory turnover ratio for calculating the average number of days that inventory is on hand until sale. d. Choices a and b. e. None of the above.
What is SARFIT and how does it operate?
What will be an ideal response?