PROBLEM NO 3 Direction: Put a check mark (/) on the column which reflects the Net Effect of accounting errors. Temporary Accounts Real Accounts No Effect Accounting Errors Overstate Understate Overstate Understate 1. Personal withdrawals from business was not recorded. 2. Purchase of a computer for cash was not recognized 3. Issuance of a note for P12,000 as payment of accounts payable was erroneously taken up as P21,000. 4. Accrued expenses are not recorded 5. Cash sales was recorded as credit Sales. 6. Accrued revenue was not recorded 7. Depreciation expense was short by 1,000. 8. Actual expense of 25,000 was erroneously recorded as P52,000 9. A 5% allowance for uncollectible accounts was neglected. 10. Interest on Notes Payable of 32,000 was recorded as 23,000.

Subject: accounting

Entries to Write Off Accounts Receivable Capstone Solutions Company, a computer consulting firm, has decided to write off the $45,800 balance of an account owed by a customer, Philadelphia Inc. a. Journalize the entry to record the write-off, assuming that the direct write-off method is used. If an amount box does not require an entry, leave it blank. Bad Debt Expense Accounts Receivable-Philadelphia Inc. ✔ Feedback 45,800 Check My Work Remember that under the direct write-off method, Bad Debt Expense is not recorded until the customer's account is determined to be worthless. Feedback 45,800 b. Journalize the entry to record the write-off, assuming that the allowance method is used. If an amount box does not require an entry, leave it blank. ✓ Check My Work

Using the Allowance method supply the journal entries to bring back the written off Account Receivable and the payment for it. Direct Write Off Method Allowance Method Bad debt expense     $500   Allowance for doubtful accounts $500        Accounts Receivable   $500      Accounts        Receivable   $500

QUESTION Caviler Company determines that it cannot collect a total of $500 from a customer. Using the allowance method, the journal entry to write off the amount would be: ANSWER Date Date Date Date Accounts Accounts Receivable Allowance for Bad Debts Accounts Bad Debts Expense Accounts Receivable Accounts Accounts Receivable Bad Debts Expense Accounts Debit Credit 500 500 Debit Credit 500 Debit Credit 500 500 500 Debit Credit 11:35 PM

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