Ben Is a Customer of Haskins & Co

question 21

Multiple Choice

Ben is a customer of Haskins & Co.which uses the allowance method to account for uncollectible accounts.The company wrote off his account of $1,200 on August 15.On October 12,he sent in a payment of $560.What will Haskins & Co.record first to reinstate his account?

• A)Debit Cash;credit Accounts Receivable/Ben.
• B)Debit Bad Debt Expense;credit Accounts Receivable/Ben.
• C)Debit Allowance for Doubtful Accounts;credit Accounts Receivable/Ben.
• D)Debit Accounts Receivable/Ben;credit Allowance for Doubtful Accounts.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Period

A specific duration of time used for financial reporting and analysis, typically a fiscal quarter or year.

Cost of Goods Sold

Direct expenditures linked to the creation of goods sold by a business.

Calculate

To determine something mathematically, such as a sum, total, or other numeric value.