Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. Bad debt is an amount that a company fails to receive when the debtors or become insolvent. To prepare: Adjusting entry under following adjustments Bad debts are 1% of total revenue Bad debts are 2% of accounts receivables.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business Solutions has total revenues of $44,000 during the first three months of 2020 and that the Accounts Receivable balance on March 31, 2020, is $22,867. Required 1. Prepare the adjusting entry to record bad debts expense on March 31, 2020, under each separate assumption. There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31. a. Bad debts are estimated to be 1% of total revenues. b. Bad debts are estimated to be 2% of accounts receivable. (Round to the dollar.) 2. Assume that Business Solutions’s Accounts Receivable balance at June 30, 2020, is $20,250 and that one account of $100 has been written off against the Allowance for Doubtful Accounts since March 31, 2020. If Rey uses the method in part 1b, what adjusting journal entry is made to recognize bad debts expense on June 30, 2020? 3. Should Rey consider adopting the direct…

Assume that the accountant of Diamond Furniture on March 1, 2018, authorizes a write-off of the RO 1000 balance owed by Mr Abdul Salam. But on July 1, Mr Abdul Salam pays the RO 1000 amount that Diamond Furniture had written off on March 1. From the following given options , identify which of the following two journal entries can be pass in the books of Diamond Furniture for the recovery of uncollectable accounts receivables under allowance method ? i ) Dr Accounts receivables A / C OMR 1000 and Cr Allowance for bad debt A / C OMR1000 ii ) Dr Allowance for bad debt A / C OMR1000 and Cr Accounts receivables A / C OMR1000 iii ) Dr Cash A / C OMR 1000 and Cr Accounts receivables A/C OMR 1000 iv) Dr Accounts receivables A/C OMR 1000 and Cr Cash A/C OMR 1000 a. i ) & iv ) b . i ) & iii ) O c . ii ) & iii ) D. i) & ii)

Donald , owner of Dallas Company , begin accounting for bad debts expense . Assume that Dallas Company has total revenues of $ 158,000 during 2019 and the Accounts Receivable balance on December31 2019 , is $ 84,000Assume that Dallas Company has one account receivable of $ 6,850 determined to be uncollectable , what journal entrymadewrite off the uncollectable account ?

Answer 2

Question

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Answer 6

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

Answer 7

Chapter 7, Problem 7SP

1.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry under following adjustments

Bad debts are 1% of total revenue

Bad debts are 2% of accounts receivables.

Answer 8

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

Answer 9

2.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To prepare: Adjusting entry for bad debts

Answer 10

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Answer 11

3.

Summary Introduction

Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor.

Bad debt is an amount that a company fails to receive when the debtors or become insolvent.

To explain: If direct write off method is better or allowance method for computing bad debts is better.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Prob. 3DQ Ch. 7 - Prob. 4DQ Ch. 7 - Prob. 5DQ Ch. 7 - Prob. 6DQ Ch. 7 - Prob. 7DQ Ch. 7 - Prob. 8DQ Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ

Solution Summary: The author explains that accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit.

Videos

Want to see the full answer?

Chapter 7 Solutions