Wendy Wu Calculates That This Year's Estimated Bad Debts Expense

question 56

Multiple Choice

Wendy Wu calculates that this year's estimated bad debts expense will be $3200.When Wendy makes the adjusting entry,the effect will be:
Bad debt Allowance for doubtful debts Gross accounts
Expense receivable

• A)Increase Increase No effect
• B)No effect Decrease No effect
• C)No effect Increase Decrease
• D)Increase No effect Decrease

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Definitions:

Philanthropic

Relating to the act of giving money, goods, time, or effort to support a charitable cause, usually over an extended period and in regard to a defined objective.

Commercial

Relating to or engaged in commerce; characterized by the intent to profit from the buying, selling, or exchanging of goods and services.

Own Identity

The distinct characteristics, values, and beliefs that define an individual, group, or organization and differentiate it from others.

Nonprofit Organizations

Entities that operate for charitable, educational, or social purposes rather than for profit, reinvesting surplus revenues in their mission.