Multiple Choice Question 113 Blue Spruce Corp. uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $400000 and credit sales are $1600000. Management estimates that 6 % of accounts receivable will be uncollectible. What adjusting entry will Blue Spruce Corp. make if the Allowance for Doubtful Accounts has a credit balance of $4000 before adjustment? Bad Debt Expense 16000 Accounts Receivable 16000 Bad Debt Expense 20000 Allowance for Doubtful Accounts 20000 Bad Debt Expense 8000 Allowance for Doubtful Accounts 8000 Bad Debt Expense 28000 Allowance for Doubtful Accounts 28000 Multiple Choice Question 124 Under the direct write-off method of accounting for uncollectible accounts a specific account receivable is decreased for the actual amount of bad debt at the time of write-off. balance sheet relationships are emphasized. bad debt expense is always recorded in the period in which the revenue was recorded. the allowance account is increased for the actual amount of bad debt at the time of write-off. Multiple Choice Question 90 A debit balance in the Allowance for Doubtful Accounts cannot occur if the percentage of receivables method of estimating bad debts is used. indicates that actual bad debt write-offs have exceeded previous provisions for bad debts is the normal balance for that account. indicates that actual bad debt write-offs have been less than what was estimated