A Company Ages Its Accounts Receivables to Determine Its End

question 190

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

Differentiate between inflationary and recessionary gaps and their implications for the economy.

Calculate equilibrium GDP relative to full employment GDP and understand the impact of gaps.

Estimate economic outcomes based on theoretical fiscal plans.

Recommend fiscal policy measures to address economic gaps.

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