A Company Ages Its Accounts Receivables to Determine Its End

question 113

Multiple Choice

A company ages its accounts receivables to determine its end of period adjustment for bad debts.At the end of the current year,management estimated that $15,750 of the accounts receivable balance would be uncollectible.
-Prior to any year-end adjustments,the Allowance for Doubtful Accounts had a debit balance of $375.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Bad Debts Expense } & 15,750 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 15,750 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Bad Debts Expense } & 15,375 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 15,375 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Bad Debts Expense } & 16,125 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 16,125 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable } & 15,750 & \\
• \hline \text { Bad Debts Expense } & 375 & \\
• \hline \text { Sales } & & 16,125 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable } & 16,125 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 16,125 \\
• \hline
• \end{array}\]

---

Definitions:

Professional Wisdom

The deep knowledge and experience that professionals accumulate over time in their field of work, aiding in decision making and problem-solving.

Policy Assessment

The process of evaluating the effectiveness, outcomes, and impacts of public policies.

Social Policy Practice

The application of social policy principles and theories in real-world settings, often involving the development and implementation of programs aimed at improving societal welfare.

Data Gathering

The process of collecting information and facts for the purpose of analysis to support decision-making or research.