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The Allowance For Doubtful Accounts Is A Contra Asset Account That Equals To Total Uncollectible Accounts Reason: As we know that Allowance For Doubtful Accounts is a Contra Asset Account which is deducted from closing balance of Accounts Receivable on Balance Sheet in order to calculate the Net Realizable Value (NRV) of Accounts Receivable , so mathematically, we can say that: Net Realizable Value = Accounts Receivable - Allowance For Doubtful Accounts Net Realizable Value + Allowance For Doubtful Accounts = Accounts Receivable Allowance For Doubtful Accounts = Accounts Receivable - Net Realizable Value As Accounts Receivable - Net Realizable Value = Total Uncollectible Accounts So, we have the following result as shown below: Allowance For Doubtful Accounts = Total Uncollectible Accounts So, we can say that Allowance For Doubtful Accounts is equal to Accounts Receivable minus Net Realizable Value of Accounts Receivable which represent total estimated uncollecti...

Answer Of MCQs The Correct Answer of this multiple choice question is (E) as under Accrual Basis of Accounting , we record Revenue when it is earned by the company whether the cash is received or not during the accounting period. As the company performed the services to the customer, so the company earned the revenue. So, we debit Accounts Receivable Account  with an amount of $10,000  as the amount of revenue not yet received by the company from the customer and credit Sales Revenue Account . You May Also Be Interested In "A Company Receives $10,000 In Cash For Services Yet To Be Performed. Using The Accrual Method, What's The Correct Entry To Record The Transaction"? Under Accrual Basis of Accounting, we record the transaction whether the cash is involved or not. That is why we record both types of transactions i.e., cash transactions and credit transactions. Due to this, we create accounts receivable, accounts payable, sales on account, purchases on account, etc. La...

Received Telephone Bill, Electricity Bill, Gas, Water Bill, etc., To Be Paid Next Month Journal Entry When a company / corporation Received A Utility Bill (Electricity, Telephone, Gas or Water Bill) to be paid next or following month, the following journal entry is recorded as shown below:                                            Utility Expenses a/c  XXX                                                                                Utility Bill Payable a/c  XXX                                          (Utility Bill Received But Still Due Or Unpaid For The...

The Correct Answer Is “True”. So, the statement is “ True” , as we debit Work In Process Inventory Account and credit Direct Materials Account in order to transfer or close Direct Materials Account to Work In Process Inventory Account during the accounting cycle. In the manufacturing process, direct material and work in process are two inventories on hand during the accounting cycle. These are calculated only in manufacturing business, which produces goods from raw material, because the manufacturing companies make the product from raw material and then process it and finally completed the product, which can be sold to customers in the market. After that cost of goods manufactured are computed. When the product is complete, another inventory called finished goods inventory is calculated. This inventory is also used in trading & merchandising concerns.

The Adjusting Journal Entry to record for Accumulated Depreciation (AD) on equipment is shown below: Depreciation Expense Account - Equipment  XXX                                                                                 Accumulated Depreciation a/c - Equipment XXX                                                      (Depreciation On Equipment Recorded For The Period) Here, we debit DE as it is allocated while AD - Equipment is credited as it is the reversal of non-current assets or fixed asset account which reduce its balance on balance sheet. What Kind Of Account Is Accumulated Depreciation Equipment? Depreciation Expense Account ...

Here We Need To Complete The Journal Entry To Record Depreciation On Machinery. The correct answer is (C) as the journal entry to record depreciation on machinery is resulted in a debit to Depreciation Expense Account and a credit to Accumulated Depreciation Account for machinery. Depreciation on machinery expense is charged to income statement while accumulated depreciation on machinery,  which is a contra asset account, is deducted from the cost of the machinery on balance sheet. Depreciation on machinery, which is a temporary account, is charged by applying either straight-line method, written-down value method, sum of years digits, etc. The other options (A, B and D) of this multiple choice question (mcq) are wrong choices here.

The journal entry to record depreciation on factory equipment or machinery is to debit a depreciation on factory equipment or machinery expense account and a credit to Accumulated Depreciation Account for factory equipment or machinery. The entry to record is shown below: Depreciation on Factory Equipment or Machinery Expense a/c  XXX                                                Accumulated Depreciation - Factory Equipment or Machinery a/c  XXX                                           (Depreciation On Factory Equipment Or Machinery Recorded)   Depreciation on Factory Equipment or Machinery Expense Account is recorded in Income Statement while Accumulated Depreciation - Factory Equipment or Machinery Account is a Contra Asset Account whic...