A Company Ages Its Accounts Receivables to Determine Its End

question 47

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 $39,375 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $3,285. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

• A) \(\begin{array}{|l|r|l|}
• \hline \text { Bad Debt Expense } & 36,090 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 36,090 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debt Expense } & 42,660 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 42,660 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Bad Debt Expense } & 39,375 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 39,375 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable } & 39,375 & \\
• \hline \text { Bad Debt Expense } & 3,285 & \\
• \hline \text { Sales } & & 42,660 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|l|}
• \hline \text { Accounts Receivable } & 36,090 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 36,090 \\
• \hline
• \end{array}\)

Recognize exceptions to the preexisting duty rule and their significance.

Comprehend the process and implications of mutual contract rescission.

Understand the principles of adequacy of consideration and how courts approach it.

Understand the concept and importance of integrating environmental concerns into strategic business planning.

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Definitions:

Spindle Activity

Oscillatory brain activity characterized by bursts of waves typically observed during specific sleep stages and believed to play a role in memory consolidation.

Rhythmic Activity

Patterns of repeated motions or sounds that occur at regular intervals, found in various biological and mechanical systems.

Medial Pontine Reticular Formation

A section of the brainstem involved in regulating autonomic functions, locomotion, and sleep-wake cycles.

Inferior Olivary Nucleus

A structure in the brainstem involved in motor control, providing input to the cerebellum and playing a role in the timing and coordination of movements.