Property Taxes in the Amount of $3,000,000 Are Billed to City

question 54

Multiple Choice

Property taxes in the amount of $3,000,000 are billed to city property owners. It is estimated that two percent will prove to be uncollectible. In recording this event,

• A)estimated Revenues would be credited for $2,940,000.
• B)bad Debts would be debited for $60,000.
• C)tax Liens Receivable would be debited for $60,000.
• D)allowance for Uncollectible Current Property Taxes would be credited for $60,000.

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Definitions:

Compounded Quarterly

Describes interest on a loan or investment calculated four times a year.

Investment

Allocating resources, usually money, with the expectation of generating an income or profit.

Semi-Annually

Pertains to events or processes that occur twice a year, often used in the context of interest calculation or payments.

Investment

Allocation of resources, such as time, money, or effort, in anticipation of future gains.