1- Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and accrued items. Select one: a. False b. True

2- After adjustment, the balance in the Allowance for Doubtful Accounts has the effect of reducing Accounts Receivable to its estimated realizable value. Select one: a. True b. False

3- Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 3% of accounts receivable, what is the amount of the bad debts expense adjusting entry?