exceeds the amount of a bad debt being written off, the entry 25) 25) If the cre

Question

exceeds the amount of a bad debt being written off, the entry 25) 25) If the credit balance of the Allowance for Doubtful Accounts account to record the write-off against the allowance account results in: A) An increase in the expenses of the current period. B) No effect on the expenses of the current period. C) A reduction in current assets. D) A reduction in current liabilities. E) A reduction in equity 26) 26) Two clerks sharing the same cash register is a violation of which internal control principle? A) Bond key employees. B) Apply technological controls C) Insure assets. D) Establish responsibilities. E) Maintain adequate records. that charges the same amount of expense to each period of the asset's useful life is called 27) A) Accelerated depreciation. B) Declining-balance depreciation. C) Modified accelerated cost recovery system (MACRS) depreciation D) Units-of-production depreciation. E) Straight-line depreciation

Explanation / Answer

A. If bad debts written off is more than the allowance for doubtful debts than such debts write off will be taken of the allowance account, as a result allowance account will get debited and debtor account will be credited. There will be no effect on the expense account as the same was debited in earlier years when we created credit balance of allowance for doubtful debts. Correct Answer is B.

B. When two clerks share the same cash register, it is in violation of principle of Establish responsibilities. Correct Answer is D.

C. Under Straight line method of depreciation, same amount is charged over the useful life of the asset. Correct answer is E.  

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