Newton Company Uses the Allowance Method of Accounting for Uncollectible

question 37

Multiple Choice

Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Best. On July 10, the entry or entries Newton makes to record the recovery of the bad debt is:

• A)\(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable - P. Best } & 3,000 & \\
• \hline \text { Allowance for Doubtful Accounts } & & 3,000 \\
• \hline \text { Cash } & 3,000 & \\
• \hline \text { Accounts Receivable - P. Best } & & 3,000 \\
• \hline
• \end{array}\)
• B)\(\begin{array} { | l | r | r | }
• \hline \text { Cash } & 3,000 & \\
• \hline \text { Bad Debts Expense } & & 3,000 \\
• \hline
• \end{array}\)
• C)\(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable - P. Best } & 3,000 & \\
• \hline \text { Bad Debts Expense } & & 3,000 \\
• \hline \text { Cash } & 3,000 & \\
• \hline \text { Accounts Receivable - P. Best } & & 3,000 \\
• \hline
• \end{array}\)
• D)\(\begin{array} { | c | r | r | }
• \hline \text { Allowance for Doubtful Accounts } & 3,000 & \\
• \hline \text { Accounts Receivable - P. Best } & & 3,000 \\
• \hline \text { Accounts Receivable - P. Best } & 3,000 & \\
• \hline \text { Cash } & & 3,000 \\
• \hline
• \end{array}\)
• E)\(\begin{array}{|c|r|r|}
• \hline \text { Cash } & 3,000 & \\
• \hline \text { Accounts Receivable - P. Best } & & 3,000 \\
• \hline
• \end{array}\)

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Definitions:

Chunking

A memory strategy that involves breaking down information into smaller, manageable units or chunks to facilitate recall.

Working Memory

A cognitive system responsible for temporarily holding information available for processing.

Semantic Memory

A type of long-term memory involving the capacity to recall words, concepts, or numbers, which is essential for the use and understanding of language.

Serial-Position Effect

A phenomenon in memory studies where items at the beginning and end of a list are remembered more easily than those in the middle.