On Average, 5% of Total Accounts Receivable Has Been Uncollectible

question 40

Multiple Choice

On average, 5% of total accounts receivable has been uncollectible in the past. At the end of the year, the current balance of accounts receivable is $100,000. The allowance for doubtful accounts has an unadjusted debit balance of $500. Credit sales during the year were $150,000. The estimated bad debt expense is:

• A) $4,500.
• B) $5,000.
• C) $5,500.
• D) $7,000.

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Definitions:

Continental Army

The army raised by the Second Continental Congress to fight against British forces during the American Revolutionary War.

Yeoman Farmers

Independent farmers who typically worked their own land, a common figure in early American society, embodying the ideal of self-sufficiency.

Prisoners Of War

Individuals captured by an enemy during armed conflict, whose treatment is governed by international law, notably the Geneva Conventions.

Meager Rations

Very small or insufficient amounts of food provided, especially under conditions of scarcity or during periods of rationing.