Which of the Following Entries Would Be Used to Account

question 122

Multiple Choice

Which of the following entries would be used to account for uncollectible receivables using the allowance method?

• A)Allowance for uncollectible accounts is debited and Bad debts expense is credited.
• B)Bad debts expense is debited and Allowance for uncollectible accounts is credited.
• C)Bad debts expense is debited and Accounts receivable is credited.
• D)Accounts receivable is debited and Bad debts expense is credited.

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Definitions:

Monthly Basis

Refers to any activity or calculation done or occurring every month.

Set-Up Costs

Expenses incurred to prepare and configure equipment or processes for production.

Activity-Based Costing

An approach to costing that recognizes organizational activities and distributes each activity's costs to every product and service, reflecting their real consumption.

High-Low Method

A technique used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.