In the Balance Sheet at the End of Its First

question 34

Multiple Choice

In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000, and cash collections from credit customers totaled $1,950,000.
- In Dinty's adjusting entry for bad debts at year-end, which of these would be included?

• A) Debit to bad debt expense for $114,000.
• B) Credit to allowance for uncollectible accounts for $82,000.
• C) Debit to accounts receivable for $32,000.
• D) All of these answer choices are correct.

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Definitions:

Incorporation

The process of legally declaring a corporate entity as separate from its owners.

Mandatory Dividend Provisions

Rules or clauses within a company's charter or bylaws that require the company to pay dividends to its shareholders under certain conditions.

Corporate Laws

Regulations and legal principles dealing with the formation, operation, and dissolution of corporations.

Legal

Pertains to the system of rules that are created and enforced through social or governmental institutions to regulate behavior.