A contra revenue
A contra asset
A debit to Allowance for Uncollectible accounts.
A debit to Bad Debt Expense
A credit to Accounts Receivable
A debit to Sales Revenue
Bad debt expense is recorded when a specific account is known to be uncollectible.
Bad debt expense is recorded after all of the current year's credit sales are collected.
Bad debt expense is recorded during the year of the credit sale
Bad debt expense is only recorded if they exceed 10% of credit sales.
The revenue recognition principle.
Properly recognizing the net realizable value of assets.
Good business practice
The effect on net account receivables depends on the relationship between the allowance account balance and the amount of the write off.
Net accounts receivable decrease
Net accounts receivable do not change.
Net accounts receivable increase.
The balance of Accounts Receivable will increase.
The balance of Bad Debt Expense will decrease.
The balance of Allowance for Uncollectible Accounts will increase
The balance of Service Revenue will increase.
Debit to inventory
Credit to accounts receivable.
Debit to Accounts Payable.
Debit to Purchases
Work in process.
All three accounts are found in a manufacturer's balance sheet
Increase to net income.
No effect on net income and ending inventory
Increase in cost of ending inventory
Decrease in net income
Work in process account
Cost of goods sold account
Finished goods account
Raw materials account
The effect of the error will depend on the sales price of the inventory
Income will be the same under each assumption