Examlex

Solved

Bender Ltd Uses the Allowance Method of Accounting for Bad

question 52

Multiple Choice

Bender Ltd uses the allowance method of accounting for bad and doubtful debts.Their accounts show:
Allowance for doubtful debts 1 July 2015 $10 200
Allowance for doubtful debts 30 June 2016 14 200
Bad & doubtful debts expense for the year 8 000
Calculate the amount of bad debts actually written off during the year.


Definitions:

Equivalent Value

The worth of an item, service, or amount in terms of another, often used in comparisons or exchanges.

Compounded Semi-annually

The process where interest is added to the principal sum of an investment or loan twice a year, resulting in interest earning interest.

Third Payment

This refers to the third installment of a series of payments toward a financial obligation.

Loan

Borrowed capital which is due to be paid back with interest.

Related Questions