An Aging of a Company's Accounts Receivable Indicates That $5,000

question 23

Multiple Choice

An aging of a company's accounts receivable indicates that $5,000 are estimated to be uncollectible.If Allowance for Doubtful Accounts has a $2,000 debit balance, the adjustment to record bad debts for the period will require a

• A)debit to Bad Debts Expense for $5,000.
• B)debit to Bad Debts Expense for $7,000.
• C)debit to Bad Debts Expense for $3,000.
• D)credit to Allowance for Doubtful Accounts for $2,000.

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Definitions:

Work In Process

Units of product that are only partially complete.

Conversion Costs

Conversion costs represent the combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished goods.

Equivalent Unit

A measurement used in process costing to equate the work done on units in progress to a number of fully completed units.

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all units available.