An Aging of a Company's Accounts Receivable Indicates That $14,000

question 10

Multiple Choice

An aging of a company's accounts receivable indicates that $14,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a

• A) debit to Bad Debt Expense for $14,000.
• B) debit to Allowance for Doubtful Accounts for $12,900.
• C) debit to Bad Debt Expense for $12,900.
• D) credit to Allowance for Doubtful Accounts for $14,000.

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Definitions:

Accounts Receivable

Amounts due to a firm from its customers for delivered services or products that remain unpaid.

Factory Overhead

Refers to the indirect manufacturing costs that are not directly tied to the production of goods, such as utilities, maintenance, and rent of the factory building.

Direct Labor Costs

Expenses related to the wages of employees who are directly involved in the production of goods or delivery of services.

Cost of Materials Used

The total cost of raw materials that have been consumed in the production process, directly contributing to the manufacture of products.