1.When a firm writes off a bad debt under the allowance method of accounting for bad debts, which of the following will occur?

The cash account will decrease.

Total net current assets will decrease.

The realizable value of accounts receivable decreases.

The realizable value of accounts receivable will not change.

2.The Allowance for Doubtful Accounts account has a year-end credit balance, prior to adjustment, of $450. The uncollectible accounts are estimated at 3% of credit sales of $650,000. After the appropriate adjusting entry to recognize the uncollectible account expense, the Allowance for Doubtful Accounts account should have a credit balance of which of the following?

$19,950

$19,050

$20,400

$19,500

Note: Subject

Financial Accounting MCQS