Which of the Following Entries Would Be the Appropriate Entry

question 62

Multiple Choice

Which of the following entries would be the appropriate entry for writing off an uncollectible account receivable under the allowance method?

• A)Dr.Bad debt expense Cr.Accounts receivable
• B)Dr.Sales Cr.Accounts receivable
• C)Dr.Accounts receivable Cr.Bad debt expense
• D)Dr.Allowance for doubtful accounts Cr.Accounts receivable

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Definitions:

Signaling Theory

A theoretical framework explaining how individuals or entities convey certain information about themselves to differentiate from others.

High-Quality

A characteristic of products or services that exceed normal expectations in terms of performance, durability, or satisfaction.

Low-Quality

Referring to products or services that fail to meet expected standards of performance, reliability, or durability.

Economic Profits

Earnings that exceed the opportunity costs of all resources used by a firm, often considered as profits above normal profits.