Insert the most appropriate answer in the space provided. According to GAAP, the
ID: 2466210 • Letter: I
Question
Insert the most appropriate answer in the space provided. According to GAAP, the amount of bad debt expense can be estimated by: Only the percent of sales method. Only the percent of accounts receivable method. Only by the aging of accounts receivable method. Only by the percent of sales method or the percent of accounts receivable method. Bad debt expense can be estimated by the percent of sales method, the percent of accounts receivable method, or by the aging of accounts receivable method. Gamer Inc. determines that it cannot collect $60 owed to it by its customer T. Jacobs. Gamer uses the direct write-off method How would the company record this transaction? Debit Bad Debt Expense for $60 and credit Accounts Receivable T. Jacobs for $60 Debit Allowance for Doubtful Accounts for $60 and credit Accounts Receivable T. Jacobs for $60. Bad Debt Expense for $60 and credit Allowance for Doubtful Accounts for S60. Debit Notes Receivable T. Jacobs for $60 and credit Accounts Receivable T. Jacobs for $60. 1 Debit Accounts Receivable 1. Jacobs lor $60 and credit Notes Receivable T. Jacobs for $60. The matching principle requires: A. That bad debts be recorded only for merchandising entities. It. the use of the direct write-off method for bad debts. The use of the allowance method of accounting for bad debts. That bad debts be estimated only on an annual basis F. That bad debts not be written off. A promissory note: A. Is a short-term investment for the maker. Is a written promise to pay a specified amount of money at a certain date. Is a liability to the payee. Is another name for an installment receivable. Cannot be used in payment of an account receivable. The person who signs a note receivable and promises to pay the principal and interest isExplanation / Answer
Answer 1: According to GAAP, the amount of bad debt expense can be estimated by:
A. Only the percent of sales method
Answer 2: Garner Inc. determines that it cannot collect $60 owed to it by its customer- T. Jacobs. Garner uses the direct write- off method. How would the company record this transaction?
A. Debit Bad Debt Expense for $60 and credit Accounts Receivable T. Jacobs for $60
Answer 3: The matching principle requires:
C. The use of the allowances method of accounting for bad debts.
Answer 4: A promissory note:
B. Is a written promise to pay a specified amount of money at a certain date.
Answer 5: The person who signs a note receivable and promises to pay the principal and interest is the:
A. Maker