1. The adjusting journal entry at year-end to record Bad Debts Expense using an Allowance method will:

a. Reduce profit and total current assets.

b. Reduce profit but will not affect total current assets.

c. Not affect profit but will reduce total current assets.

d. Not affect profit or total current assets.

e. None of the above.

2. ABC Company recorded Bad Debts Expense of $30,000 and recorded write-offs of

Accounts Receivable of $25,000 during 2022. The net effect of these two transactions

on profit was a decrease of:

a. $55,000

b. $5,000

c. $25,000

d. $30,000

e. $0

3. A dentist purchases $700 (plus HST of 13%) of dental supplies for her dental practice.

She will record the $91 of HST paid as:

a. A debit to HST Recoverable.

b. Not recorded in either HST Recoverable or HST Payable account.

c. A credit to HST Recoverable.

d. A debit to HST Payable.

e. A credit to HST Payable.

4.

7. The journal entry to record the dishonouring (no hope of collection) of a

note receivable includes a debit to:

1. Accounts Receivable
2. Bad Debts Expense
3. Loss on Notes Receivable
4. Allowance for Doubtful Accounts
5. None of the above