A Company Has $90,000 in Outstanding Accounts Receivable and It

question 41

True/False

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current credit balance (before adjustments) in the allowance for doubtful accounts is $800. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for $7,000.

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Definitions:

Self-direction

The ability of an individual to set their own goals and to take initiative in planning and executing tasks without external influence.

Strong Need

A compelling or critical requirement for something essential or very important.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

Fleeting Inspiration

transient moments of creative or motivational spark that quickly come and go.