Chapter 7 - Profit Determination - Balance Day Adjustments Flashcards
What is the transaction to allow for doubtful debts?
The transaction to allow for doubtful debts is:
Debit doubtful debts.
Credit allowance for doubtful debts.
What is the transaction to write off a bad debt?
Debit allowance for doubtful debts.
Credit accounts receivable.
When calculating the allowance for doubtful debts, what do you do with the over allowance from the previous year?
Subtract over allowance from the previous year from allowance.
When calculating allowance for doubtful debts, what do you do with the under allowance from last year?
You add the allowance from last year to the allowance for doubtful debts.
What is the transaction for a prepaid expense?
Dr Expense.
Cr Prepaid expense.
What is the transaction for accrued income?
Dr Accounts receivable.
Cr Income.
What is the transaction for an accrued expense?
Dr Expense.
Cr Liability.
What is the transaction for unearned income?
Dr Unearned income liability.
Cr Income.
