Question 25 2.5 pts

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

Bad Debts Recovered

Bad Debts Expense

Interest Expense

Accounts Receivable

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Question 26 2.5 pts

What would be the basis for the following entry on a firm's records?

Bad Debt Expense 150

Allowance for Doubtful Accounts 150

The firm is using the direct write-off method.

The firm is writing off an uncollectible account.

The firm is using the allowance method for estimating bad debt.

All of these answers are correct.

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Question 27 2.5 pts

A written promise to pay a certain sum of money to another person or company is a:

Promissory Note Payable.

Promissory Note Receivable.

Promissory Accounts Payable.

Promissory Accounts Receivable.

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Question 28 2.5 pts

Sonny's Service Bureau is able to collect an amount previously written off last year under the direct write-off method. The journal entry will:

increase Bad Debts Recovered.

decrease Cash.

decrease Accounts Receivable.

decrease Bad Debts Expense.