Ariel IncUses the Allowance Method of Accounting for Uncollectible Accounts Receivable

question 41

Multiple Choice

Ariel Inc.uses the allowance method of accounting for uncollectible accounts receivable and estimates that 2% of the credit sales of $1,650,000 for the year ended will be uncollectible.Allowance for Doubtful Accounts has a negative unadjusted balance of $(1,600) at the end of the year.Determine the amount of the adjustment to record the provision for doubtful accounts.

• A) $33,000
• B) $31,400
• C) $34,600
• D) $30,000

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Definitions:

Primary Aging

The gradual, inevitable process of physical decline that occurs throughout life, regardless of health practices.

Functional

Designed to be practical and useful, rather than solely attractive.

Secondary

Refers to the second level or stage in a series or a process, often used in education to describe schools for students aged approximately 11 to 18.

Life Expectancy

The average period that an individual is expected to live, often calculated from birth, based on a number of factors including historical data, current age, and health status.