A Company Uses the Allowance Method and Has Estimated $28,000

question 47

Multiple Choice

A company uses the allowance method and has estimated $28,000 as uncollectible. The journal entry to record the estimated bad debts is:

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Definitions:

Express Condition

A clearly stated, specific condition in a contract that must be met for the performance of the contract to be required or for a party to fulfill its obligations.

Implied Condition

A legal term referring to a term or condition not expressly stated in a contract but assumed to be included by necessity or by the nature of the agreement.

Materially Breach

A significant failure to perform one's duties under a contract that results in harm to the other party and provides grounds for termination of the agreement.

Total Breach

A significant failure to fulfill a core obligation of a contract, allowing the other party to terminate the agreement and seek damages.