TB 08-14 TechCom has $40,000 in outstanding accounts ...

TechCom has $40,000 in outstanding accounts receivable. Past experience suggests that 5% of outstanding receivables are uncollectible. The current balance in the allowance for doubtful accounts is $2,500 debit. The required adjusting journal entry includes a debit to bad debt expense for $4,500.

True or False

TrueFalse...

During the current year, TechCom concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assuming the allowance method is used to account for bad debts?

Multiple Choice

• No effect on net income or on total assets

• Increase in net income; no effect on total assets

• No effect on net income; decrease in total assets

• Decrease in net income; no effect on total assets

• Decrease in net income; decrease in total assets

• TB 08-68 On December 31

  On December 31 of the current year, TechCom's unadjusted trial balance included the following items: Accounts Receivable, debit balance of $107,250; Allowance for Doubtful Accounts, credit balance of $1,900. What amount should be debited to Bad Debt Expense, assuming 6% of outstanding accounts receivable as of December 31 of the current year, are estimated to be uncollectible?

  Multiple Choice

• $6,435

• $4,535

• $8,335

• $2,835

• $3,755