Using the Percentage-Of-Receivables Basis, the Uncollectible Accounts for the Year

question 142

Multiple Choice

Using the percentage-of-receivables basis, the uncollectible accounts for the year is estimated to be $38,000. If the balance for the Allowance for Doubtful Accounts is a $7,000 debit before adjustment, what is the amount of bad debt expense for the period?

• A) $7,000
• B) $31,000
• C) $38,000
• D) $45,000

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Definitions:

Contract Frustration

A legal concept where a contract becomes impossible to fulfill due to unforeseen events, relieving the parties of their duties.

Contractual Obligation

A duty, promise, or performance that is legally binding under a contract.

Frustrated

Feeling upset or annoyed as a result of being unable to change or achieve something.

Performance

The accomplishment of a task or duty in accordance with a contract, including the delivery of goods or services.