A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and a. is acceptable as a means to pay current liabilities. b. has a current market value that is greater than its original cost c. bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation. d. is so near its maturity that it presents insignificant risk of changes in interest rates. When a company has cash available in another account in the same bank at which an overdraft has occurred, the company will a. offset the overdraft against cash account. b. report the same in the notes to financial statement. c report the bank overdraft amount as account payable. d. classify the bank overdraft as compensating balance. What is the normal journal entry for recording bad debt expense under the allowance method? a. Debit Allowance for Doubtful Accounts, credit Accounts Receivable. b. Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. c. Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. d. Debit Accounts Receivable, credit Allowance for Doubtful Accounts. If the estimate of uncollectible is made by taking 2% of net sales, the amount of the adjustment a. $6, 700. c. $8, 500. b. $8, 220. d. $9, 740. If the estimate of uncollectible is made by taking 10% of gross account receivables, the amount the adjustment is a. $3, 540. c. $4, 224. b. $4, 300. d. $5, 060