Reference no: EM132789957

Problem 1: If a company uses the direct write-off method of accounting for bad debts,

a.it will report accounts receivable on the balance sheet at their net realizable value.

b.it is applying the matching principle.

c.it will reduce the Accounts Receivable account at the end of the accounting period for estimated uncollectible accounts.

d.it will record bad debts expense only when an account is determined to be uncollectible.

Problem 2: On January 15, 2017, the accounts receivable balance was $7,000 and the balance in Allowance for Doubtful Accounts was $700. On January 16, 2017, a $200 uncollectible account was written off. The net realizable value of accounts receivable on January 16 immediately after the write-off is

a. $6,500.

b. $6,300.

c. $6,800.

d. $7,900.