.Under the allowance method of recognizing uncollectible accounts, the entry to write off
an uncollectible account
increases the allowance for uncollectible accounts.
has no effect on the allowance for uncollectible accounts.
has no effect on net income
decreases net income.
The following accounts were abstracted from Todd Co.'s unadjusted trial balance
at December 31, 2007:
Allowance for uncollectible accounts
Net credit sales
Todd estimates that 2% of the gross accounts receivable will become
uncollectible. After adjustment at December 31, 2007, the allowance for
uncollectible accounts should have a credit balance of
On January 1, 2006, Marr Co. exchanged equipment for a $400,000 zero-interest-
bearing note due on January 1, 2009. The prevailing rate of interest for a note of
this type at January 1, 2006 was 10%. The present value of $1 at 10% for three
periods is 0.75. What amount of interest revenue should be included in Marr's
2007 income statement?
In preparing its August 31, 2007 bank reconciliation, Adel Corp. has available the
Balance per bank statement, 8/31/07
Deposit in transit, 8/31/07
Return of customer's check for insufficient funds, 8/30/07
Outstanding checks, 8/31/07
Bank service charges for August
At August 31, 2007, Adel's correct cash balance is