If the Allowance for Doubtful Accounts on January 1 Equals

question 204

Multiple Choice

If the Allowance for Doubtful Accounts on January 1 equals $10,000 and during the year $9,000 of specific customers' accounts were written off,then its Allowance for Doubtful Accounts will have an unadjusted balance of:

• A)$1,000 credit.
• B)$1,000 debit.
• C)$10,000 credit.
• D)$9,000 debit.

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Definitions:

Equity Method

An accounting technique used for recording investments in associate companies where the investment is initially recognized and subsequently adjusted for the investor’s share of the net assets of the investee, including recognized income or loss.

Cost Method

An accounting method used to record investments in which the investment is recorded at its acquisition cost without recognizing subsequent changes in market value.

Investment Method

A technique for recognizing the investor's share of investee profits and adjusting the carrying amount of the investment accordingly.

Accounting

The systematic process of recording, summarizing, and reporting the financial transactions and positions of a company.