14) MULTIPLE CHOICE·Choose de ese alternative that best complete, the statement

Question

14) MULTIPLE CHOICE·Choose de ese alternative that best complete, the statement or answers the question 1) Bebore any inbernal cetrol peoendure is initiated, which of the following queitions must be prinarily addiresed by a company? A) Will this put an end to theft? errors? this prevent accounting D) is this the best security money can buy? Q How much benelit will be derived from the cost of the procedure? 15) On January L 2019, Triangle arp. has the following account balances AMowance for Bad Debts Daring the year, Triangle has $155,000 of credit sales, collections of credit sales of $142,000, and write- offs of $3-400 It records bad debés expense at the end aging- of- ecelvables method. At the end of the year, the aging analysis shows that $2000 is the estimate of uncollectible accounts efore the year- end entry to adjust the bad debts expense is muadle the balance in the Allowance for Bad Debts is A) a zero balance Q a debit of $MOXo of the year using the B) a debit of$1800 D) a credit of $5000 te your answew in the space provided or on a separate sheet of paper conlight ine wrote off the account of one of its customers X in 2018 for $500. On January 21, 2019, x pectedly nepuied his mccount in falt. The company uses the direct write- off method to account for Inc on January 21, 2019, Omit

Explanation / Answer

Before any internal control procedure is initiated, companies review the benefit derived from the cost of the procedure, Cost benefit analysis will be done by the company. Option C

Accounts recievable A/C

Out of bad debts of 3,400, 1,600 will be adjusted against the provision for bad debts A/c and balance 1,800 will be directly adjusted against the debtors

Allowance for bad debts A/c  

Therefore the balance in allowance for bad debts will be zero

Particulars Debit Particulars Credit To balance b/d 19,000 By collections 142,000 To Credit sales 155,000 By bad debts written off 1800

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