A Company Ages Its Accounts Receivables to Determine Its End

question 36

Multiple Choice

A company ages its accounts receivables to determine its end of period adjustment for bad debts.At the end of the current year,management estimated that $15,750 of the accounts receivable balance would be uncollectible.Prior to any year-end adjustments,the Allowance for Doubtful Accounts had a debit balance of $375.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debts Expense } & 15,750 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 15,750 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debts Expense } & 15,375 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 15,375 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debts Expense } & 16,125 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 16,125 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable } & 15,750 & \\
• \hline \text { Bad Debts Expense } & 375 & \\
• \hline \text { Sales } & & 16,125 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|l|}
• \hline \text { Accounts Receivable } & 16,125 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 16,125 \\
• \hline
• \end{array}\)

---

Definitions:

Phantom Limb Sensations

Refers to the feeling that an amputated or missing limb is still attached to the body and is moving appropriately with other body parts.

Rubber-Hand Illusion

A psychological experiment that demonstrates how sensory information can influence the perception of one’s body, creating the illusion that a rubber hand is part of the participant’s body.

Tinnitus

A condition characterized by hearing noises (like ringing, buzzing, or humming) in the ears when no external sound is present.

Chemical Sense

A type of sensory perception, including taste and smell, that allows organisms to detect chemical substances in their environment.