Feingold Corporation Uses the Direct Write-Off Method of Accounting for Uncollectible

question 39

Essay

Feingold Corporation uses the direct write-off method of accounting for uncollectible accounts. On February 2, 2013, after making numerous efforts to collect $2,400 from a customer, the company wrote off the account. On April 1, 2013, the customer paid the $2,000 to Feingold. Make the appropriate entries to 1) write off the account; 2) reestablish the account receivable; and 3) to record the collection.

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Definitions:

Income Summary Account

An account used in the closing process that summarizes the revenues and expenses of a period, ultimately transferring the net income or loss to retained earnings.

Accounting Period

The time span for which financial statements are prepared, typically a year, a quarter, or a month.

Actual Manufacturing Overhead

The real expenses incurred during the manufacturing process, excluding direct labor and raw material costs, such as utilities, depreciation, and maintenance.

Incurred

Refers to costs or expenses that have been realized or consumed in the course of business operations.