1.

Under the allowance method, when a specific account is written off

total assets will be unchanged.

net income will decrease.

total assets will increase.

total assets will decrease.

2.

Blossom Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $310000 and credit sales are $3110000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Blossom Company make if the Allowance for Doubtful Accounts has a credit balance of $3100 before adjustment?

Bad Debt Expense		9300
	Accounts Receivable		9300

Bad Debt Expense		9300
	Allowance for Doubtful Accounts		9300

Bad Debt Expense		12400
	Accounts Receivable		12400

Bad Debt Expense		12400
	Allowance for Doubtful Accounts		12400

3.

Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $55000. If the balance of the Allowance for Doubtful Accounts is an $11000 debit before adjustment, what is the balance after adjustment?

$55000

$11000

$44000

$66000

4.

Novak Corp. does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $42718. If the sales tax rate is 6%, what amount must be remitted to the state for February's sales taxes?

$2418

It cannot be determined.

$2563

$2410

5.

Splish's Boutique has total receipts for the month of $43890 including sales taxes. If the sales tax rate is 5%, what are Splish's sales for the month?

$41800

$41696

$43890

It cannot be determined.

6.

Sunland Company uses the percentage-of-receivables method for recording bad debt expense. The Accounts Receivable balance is $310000 and credit sales are $1240000. Management estimates that 6% of accounts receivable will be uncollectible. What adjusting entry will Sunland Company make if the Allowance for Doubtful Accounts has a credit balance of $3100 before adjustment?

Bad Debt Expense		12400
	Accounts Receivable		12400

Bad Debt Expense		6200
	Allowance for Doubtful Accounts		6200

Bad Debt Expense		21700
	Allowance for Doubtful Accounts		21700

Bad Debt Expense		15500
	Allowance for Doubtful Accounts		15500