Newton Company Uses the Allowance Method of Accounting for Uncollectible

question 77

Multiple Choice

Newton Company uses the allowance method of accounting for uncollectible accounts.On May 3,the Newton Company wrote off the $3,000 uncollectible account of its customer,P.Best.On July 10,Newton received a check for the full amount of $3,000 from Best.On July 10,the entry or entries Newton makes to record the recovery of the bad debt is:

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), reflecting the percentage of income paid in taxes.

Taxable Income

The amount of income that is used to calculate an individual's or a company's income tax due to the government.

Average Tax Rate

The fraction of total income that goes to taxes, calculated by dividing the total amount of taxes paid by the taxpayer's total income.

Interest Income

The income earned by an entity from its investments in interest-bearing financial assets such as bonds, loans, or savings accounts.