Which of the Following Entries Would Be Used to Account

question 129

Multiple Choice

Which of the following entries would be used to account for uncollectible receivables using the allowance method?

• A) Allowance for uncollectible accounts is debited and Uncollectible accounts expense is credited.
• B) Uncollectible accounts expense is debited and Allowance for uncollectible accounts is credited.
• C) Uncollectible accounts expense is debited and Accounts receivable is credited.
• D) Accounts receivable is debited and Uncollectible accounts expense is credited.

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Definitions:

Captive Finance Company

A finance company that is wholly owned by a parent company, primarily for the purpose of providing financing to the customers of the parent company.

Credit Function

The role of extending credit to consumers or businesses, enabling the purchase of goods or services before payment.

Controlled Disbursements

A cash management technique where companies strategically issue payments to regulate their cash outflows and maximize the available cash.

Junior Subsidiary

A subsidiary that ranks below other subsidiaries in claim on assets and earnings.