You Have Just Received Notice That Agnes Fisher,a Customer of Yours

question 90

Multiple Choice

You have just received notice that Agnes Fisher,a customer of yours with an Accounts Receivable balance of $200,has gone bankrupt and will not be making any future payments.Assuming you use the allowance method,the journal entry you make is to

• A)debit Uncollectible Accounts Expense and credit Accounts Receivable.
• B)debit Allowance for Uncollectible Accounts and credit Uncollectible Accounts Expense.
• C)debit Uncollectible Accounts Expense and credit Allowance for Uncollectible Accounts.
• D)debit Allowance for Uncollectible Accounts and credit Accounts Receivable.

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Definitions:

Account Balances

The total amount of money in a financial account, determined by adding all credits and subtracting all debits.

Accrued Expenses

Expenses that have been incurred but not yet paid for, resulting in a liability recorded on the balance sheet.

Incurred

Incurred refers to costs or expenses that have been realized or taken on, often in the process of conducting business or other activities.

Stockholders' Equity

The amount of capital given to a company by its shareholders plus its retained earnings.