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:

General Partner

A member of a partnership who has unlimited liability and is actively involved in the management of the partnership.

Business Management

The act of organizing, planning, leading, and controlling resources to achieve specific business objectives.

Venture Capitalism

The practice of investing in early-stage companies with strong growth potential in exchange for equity stakes.

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An ownership interest in a company through the holding of its stock, indicating a financial share in the entity's assets and profits.