Use the Following Information for Questions 104 and 105

question 31

Multiple Choice

Use the following information for questions 104 and 105.
A trial balance before adjustments included the following:
-If the estimate of uncollectibles is made by taking 2% of net sales, the amount of the adjustment is

• A) $13,400.
• B) $16,440.
• C) $17,000.
• D) $19,480.

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Definitions:

Third Party

An individual or group besides the two primarily involved in a transaction or legal case.

Undisclosed Principal

A party in a contract whose identity is not revealed to the third party by the agent, allowing the principal to conduct transactions anonymously.

Limited Partners

Investors in a partnership who are not involved in the day-to-day management of the business and whose liability is limited to the amount they have invested.

Insanity

When a person cannot understand the nature or consequences of his acts.