Gideon Company Uses the Allowance Method of Accounting for Uncollectible

question 148

Multiple Choice

Gideon Company uses the allowance method of accounting for uncollectible accounts.On May 3,the Gideon Company wrote off the $2,000 uncollectible account of its customer,A.Hopkins.On July 10,Gideon received a check for the full amount of $2,000 from Hopkins.On July 10,the entry or entries Gideon makes to record the recovery of the bad debt is:

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable-A Hopkins } & 2,000 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 2,000 \\
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Accounts Receivable-A Hopkins } & & 2,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Bad debts expense } & & 2,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable-A Hopkins } & 2,000 & \\
• \hline \text { Bad debts expense } & & 2,000 \\
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Accounts Receivable-A Hopkins } & & 2,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Allowance for Doubtful Accounts } & 2,000 & \\
• \hline \text { Accounts Receivable-A Hopkinse } & & 2,000 \\
• \hline \text { Accounts Receivable-A Hopkins } & 2,000 & \\
• \hline \text { Cash } & & 2,000 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Accounts Receivable-A Hopkins } & & 2,000 \\
• \hline
• \end{array}\)

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Definitions:

Teratogens

Agents or factors that cause malformation of an embryo or fetus, such as certain drugs, chemicals, or infections.

Vulnerable Period

A timeframe during which an individual or system is more susceptible to damage or harm due to exposure to stresses or adverse conditions.

Congenital

Present at birth; resulting from the prenatal environment.

Prenatal Environment

The set of environmental factors, including nutrition, stress, maternal health, and external toxins, that influence the fetus during pregnancy.