Using the Allowance Method,which Is the Correct Adjusting Journal Entry

question 29

Multiple Choice

Using the allowance method,which is the correct adjusting journal entry to record bad debt expense?

• A)Debit Bad Debt Expense and credit Allowance for Doubtful Accounts.
• B)Debit Allowance for Bad Debt Expense and credit Bad Debt Expense.
• C)Debit Bad Debt Expense and credit Sales Revenue.
• D)Debit Bad Debt Expense and credit Accounts Receivable.

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Definitions:

Rational Decision Makers

Individuals or entities that make choices by systematically processing available information, evaluating the potential costs and benefits, aiming to achieve the maximum level of satisfaction.

Economic Behaviors

Actions or decisions of individuals, households, and organizations regarding production, distribution, and consumption of goods and services.

Mental Processes

The internal cognitive operations that underlie thinking, reasoning, perception, and emotional responses.

Behavioral Economics

The study of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions.