Data for the Year Ended December 31 Are Presented Below

question 80

Multiple Choice

Data for the year ended December 31 are presented below:

-Refer to AT&U Company. If the company estimates its bad debt to be 2% of net credit sales, what will be the balance in the Allowance for Doubtful Accounts account after the adjustment for bad debts?

• A)$20,000
• B)$19,000
• C)$49,000
• D)$69,000

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Definitions:

Owners

Owners are individuals or entities that hold legal title to assets, businesses, or property.

Business Entity Principle

The accounting concept that separates the transactions of a business from those of its owners or other businesses.

Operating

Pertaining to the core business functions and activities of an organization that contribute to the production of goods or services.

General Principles

Broad and fundamental guidelines or rules that form the basis for a field of study or profession.