When Using the Allowance Method,the Year-End Journal Entry to Record

question 10

True/False

When using the allowance method,the year-end journal entry to record bad debt expense reduces current assets and net income.

---

Definitions:

Perpetual Inventory Method

An inventory accounting system where updates are made continuously to the inventory records to reflect sales and purchases.

Job Order Cost System

An accounting system used to accumulate costs associated with a specific production batch or job.

Raw Materials Inventory

Raw materials and components that a company holds for future use in the production process to create goods and services.

General Ledger

The comprehensive set of accounts that shows all transactions of a business, serving as the main accounting record.