Which of the Following Is an Accounting Procedure That (1)

question 111

Multiple Choice

Which of the following is an accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period the sales are recorded, and (2) reports accounts receivable at the estimated amount of cash to be collected?

• A) Adjustment method for uncollectible debts.
• B) Direct write-off method of accounting for bad debts.
• C) Allowance method of accounting for bad debts.
• D) Cash basis method of accounting for bad debts.
• E) Aging of notes receivable.

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Definitions:

Recording

The process of capturing all financial transactions of a company for inclusion in its accounting records.

Posting

The process of recording transactions in the ledger accounts as part of the accounting cycle.

Debit

An accounting entry that represents an increase in assets or expenses, or a decrease in liabilities or equity, recorded on the left side of the accounting ledger.

Credit

The provision of goods, services, or money with the expectation of future payment, or an entry in accounting that increases liabilities and decreases assets.