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Allowance for Doubtful Accounts is a contra account that is deducted from Accounts Receivable on the balance sheet. Question 3 Under the allowance method, Bad Debt Expense is debited when an account is deemed uncollectible and must be written off. Question 4 Interest on a 6-month, 10 percent, $10,000 note is calculated by multiplying $10,000 ´ 0.10 ´ 6/12. Question 5 If a company has significant concentrations of credit risk, it must discuss this risk in the notes to its financial statements. Question 6 Interest is usually associated with Question 7 On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received? Question 8 The expense recognition Question 9 Which one of the following is not a principle of sound accounts receivable management? Question 10 Bad Debt Expense is considered Question 11