When a company is using the direct write-off method, and an account is written off, the journal entry consists of a a. debit to the allowance for bad debts and a credit to accounts receivable b. credit to accounts receivable and a debit to bad debts expense c. debit to accounts receivable and a credit to cash d. credit to accounts receivable and a debit to interest expense
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Ответ:
B.
Explanation:
An uncollectible account or bad debt is an account receivable that the business cannot collect. Businesses account for bad debts by using :
-the allowance method.
-the direct write-off method .
The direct write-off method is primarily used by businesses with few credit customers. When it is determined that a customer is not going to pay, the uncollectible account is removed from the records.
To remove from the records, there is a credit to Accounts Receivable (asset account, increase by the debit) and a debit to Bad Debts Expense (expense account, increase by the debit).
Ответ:
118.94
Explanation:
Markup Price is the price which is marked above the cost price. It may be different from selling price if any discount is offered to the customer on the marked price, and it may be same if there is no discount offered to the customer.
Cost Price = $84.96
Markup Price = 40% above cost price = 84.96×(1+(40/100)) = 84.96 × 1.4 = 118.94
Selling Price = Markup Price × (1 - ((Discount %)/100))
Assuming no discount is offered to customer, Selling Price = Markup Price, and hence Selling Price = 118.94