20) Which of the following adjusts the company's balance of cash in a bank reconciliation? A) Interest earned. C) Deposits outstanding. 20) B) Checks outstanding. D) An error by the bank. 21) On March 17, Fox Lumber sells materials to Whitney Construction for $12,000, terms 2/10, n/30. Whitney pays for the materials on March 23. What amount wold Fox record D) $12,240 21) as revenue on March 17? C) $12,000 B) $11,760 A) $12,400 22) 22) The allowance method for uncollectible accounts: A) Is required by GAAP. B) Allows for the possibility that some accounts will not be collected. C) Reports net accounts receivable for the amount of cash expected to be collected. D) All of the above are correct. 23) 23) Using the allowance method, the entry to record a write-off accounts receivable will include: A) A debit to Bad Debt Expense B) A debit to Allowance for Uncollectible Accounts. C) No entry because an allowance for uncollectible accounts was established in a prior period. D) A debit to Service Revenue. 24) Using the allowance method, the effect on the current year's financial statements of writing off an account receivable generally is to: A) Decrease total assets. C) Both a. and b. 24) B) Decrease net income. D) Neither a. nor b. 25) The direct write-off method is generally not permitted for financial reporting purposes because: 25) A) Compared to the allowance method, it would allow greater flexibility to managers in manipulating reported net income. B) This method is primarily used for tax purposes C) It is too difficult to accurately estimate future bad debts. D) Accounts receivable are not stated for the amount of cash expected to be collected. 26) Which inventory cost flow assumption generally results in the lowest reported amount for cost of goods sold when inventory costs are rising? A) Lower of cost and net realizable value. B) FIFO C) LIFO D) Weighted-average cost 26)