Using the Aging Approach,management Estimates That 10% of the $10,000

question 102

Multiple Choice

Using the aging approach,management estimates that 10% of the $10,000 of Accounts Receivable will be uncollectible.The Allowance for Doubtful Accounts has a $100 unadjusted credit balance.After the bad debt adjusting entry is recorded,Bad Debt Expense on the income statement will be ______ the Allowance for Doubtful Accounts on the balance sheet.

• A) $100 more than
• B) $100 less than
• C) the same amount as
• D) $9,900 more than

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Definitions:

Petty Cash Fund

A nominal sum of cash reserved for quick payments of assorted trivial expenses.

Replenishing

Refers to the process of adding stock or supplies to bring quantities back up to predetermined levels.

Debit To Cash

An accounting entry that increases the cash balance in a company's books, reflecting an influx of money.

Mail Receipts

Documentation or evidence of receiving goods or correspondence through the postal service.