Reference no: EM132661342

Problem 1: Allowance for Doubtful Debts is closed to the Income Summary at the end of the financial year.

Select one:

True
False

Problem 2: If the amount of bad debts is significant, use of the direct write-off method increases the usefulness of both the income statement and statement of financial position.

Select one:

True

False

Problem 3: At the end of the year, Mike Ltd has the following data shown in the financial statements: Accounts Receivable $50,000; Allowance for Doubtful Debts $2,000, Bad Debt Expense $3,000. What is the expected recoverable amount of the accounts receivable?

Select one:

a. $45,000

b. $50,000

c. $47,000

d. $48,000