Jackson Company Uses the Allowance Method to Account for Bad

question 60

Multiple Choice

Jackson Company uses the allowance method to account for bad debts. During 20X4, a customer became bankrupt and a receivable of $5,000 was deemed uncollectible. What is the entry to record the uncollectible amount? $$\begin{array} { | l | l | r | r | } \hline \text { A) } & \text { Allowance for doubtful accounts } & 5,000 & \\\hline & \text { Trade receivables } & & 5,000 \\\hline \text { B) } & \text { Bad debt expense } & 5,000 & \\\hline & \text { Allowance for doubtful accounts } & &5,000 \\\hline \text { C) } & \text { Allowance for doubtful accounts } & 5,000 & \\\hline & \text { Bad debt expense } & & 5,000 \\\hline \text { D) } & \text { Loss on receivables } &5,000 & \\\hline & \text { Trade receivables } & &5,000 \\\hline\end{array}$$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Unemployment Rate

The percentage of the labor community that is jobless and in active pursuit of employment.

Cyclical Unemployment

Joblessness attributable to fluctuations in the economic cycle, such as recessions, leading to reduced demand for goods and services.

Unemployment Rate

The proportion of the employable population that is not working but actively looking for work.

Recovery Phase

A stage of the economic cycle where activity starts increasing again after a downturn, leading to higher employment and output levels.