A Company Uses the Allowance Method and Has Determined a Customer's

question 53

Multiple Choice

A company uses the allowance method and has determined a customer's bill for $2,000 must be written off.The journal entry to record the write off is:

• A) \(\begin{array} { | c | l | }
• \hline \text { Allowance for Doubtful Accounts } & \$ 2,000 \\
• \hline \text { Bad Debt Expense } & \$ 2,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | r | l l | }
• \hline\text { Allowance for Doubtful Accounts } & \$ 2,000 & \\
• \hline \text { Accounts Receivable } & \$ 2,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | r | l l | }
• \hline\text { Accounts Receivable} & \$ 2,000 & \\
• \hline \text { Allowance for Doubtful Accounts } & \$ 2,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | c | l c | }
• \hline\text { Bad Debt Expense } & \$ 2,000 \\
• \hline \text { Allowance for Doubtful Accounts } & \$2,000 \\
• \hline
• \end{array}\)

Grasp how service department charges and other expenses are allocated and impact departmental and overall company performance.

Learn about the performance evaluation measures and reports for different types of responsibility centers.

Understand how decentralized units operate and make decisions within the broader company context.

Understand the concept of gross profit and how it is calculated for different divisions.

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Definitions:

Failure

The lack of success in achieving a goal or maintaining a standard, often leading to negative outcomes or the need for corrective action.

Heavy Caseloads

Describes situations where individuals or organizations are required to manage a large number of tasks, responsibilities, or cases simultaneously, often leading to increased workload and stress.

Turnover Rates

The rate at which an organization loses and must replace its employees, often used as an indicator of the workplace environment or satisfaction.

Environmental Stress

Stress arising from factors in one's environment, such as noise, crowding, or pollution.