16. The Allowance for Bad Debts account has a debit balance of$7,000 before the adjusting entry for bad debts expense. Afteranalyzing the accounts in the accounts receivable subsidiary ledgerusing the aging-of-receivables method, the company's managementestimates that uncollectible accounts will be $15,000. What amountof bad debts expense will be reported on the income statement?
19. In reviewing the T-account for Accounts Receivable, you findthat the beginning balance is zero, the total increases are $4,900and the total decreases are $2,400. This means that the endingbalance of the account is a credit balance of $2,500.
True
False
29. An invoice is also known as a bill.
True
False
30. A cash equivalent is a highly liquid investment that can beconverted into cash in three years or less.
True
False
32. Which of the following is true of a purchases journal?
A.Cash purchases are recorded in the purchases journal.
B.For a periodic inventory system, the Merchandise Inventory DRcolumn is replaced with a column titled Cost of Goods Sold DR.
C.The Other Accounts DR column is used for purchases on accountof items other than merchandise inventory and office supplies.
D.For a perpetual inventory system, a column titled Purchases DRis needed.