A Company Uses the Allowance Method and Expects Not to Collect

question 81

Multiple Choice

A company uses the allowance method and expects not to collect $15,000 of sales.The journal entry to record the estimated bad debt is:

• A) \(\begin{array} { | c | l l | }
• \hline \text { Allowance for Doubtful Accounts } & \$ 15,000 & \\
• \hline \text { Bad Debt Expense } & \$ 15,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | r | l l | }
• \hline\text { Allowance for Doubtful Accounts } & \$ 15,000 & \\
• \hline \text { Accounts Receivable } & \$ 15,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | c | l c | }
• \hline\text { Accounts Receivable } & \$ 15,000 \\
• \hline \text { Allowance for Doubtful Accounts } & \$ 15,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | c | l c | }
• \hline\text { Bad Debt Expense } & \$ 15,000 \\
• \hline \text { Allowance for Doubtful Accounts } & \$ 15,000 \\
• \hline
• \end{array}\)

---

Definitions:

Highly Unionized

Describes sectors or organizations with a substantial proportion of workers who are members of labor unions.

Public Administration

The implementation of government policies and an academic discipline that studies this implementation and prepares civil servants for working in the public service.

Utilities

Basic services provided to support the functioning of households and businesses, such as water, electricity, and gas.

Education

The systematic process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and habits.