The Year-End Adjusting Entry to Record Bad Debt Expense Will

question 23

Multiple Choice

The year-end adjusting entry to record bad debt expense will increase which of the following ratios?

• A)Current.
• B)Earnings quality.
• C)Quick.
• D)Net profit margin.

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Definitions:

Outstanding Checks

Checks that have been written and recorded in the paying entity's accounting system but have not yet been cashed or cleared by the bank.

Purchase Requisitions

Purchase requisitions are formal requests made within an organization to purchase goods or services, typically before a purchase order is created and allocated the necessary budget.

Purpose

The purpose behind why something is done, created, or exists.

Petty Cash Fund

A small amount of cash on hand used for minor or incidental expenses within a business.