Using the Percentage-Of-Receivables Basis, the Uncollectible Accounts for the Year

question 87

Multiple Choice

Using the percentage-of-receivables basis, the uncollectible accounts for the year is estimated to be $38,000. If the balance for the Allowance for Doubtful Accounts is a $7,000 credit before adjustment, what is the amount of bad debt expense for the period?

• A) $7,000
• B) $31,000
• C) $38,000
• D) $45,000

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Definitions:

Debt To Suppliers

The total amount of money a company owes to its suppliers for goods and services purchased on credit.

Floor Inventory

Inventory on hand that is available for sale to customers in a retail, wholesale, or manufacturing space.

Accounts Receivable

The sum customers must pay to a business for goods or services that have been provided but not financially covered.

Building Contractor

A professional or company responsible for overseeing the construction process, including the coordination of labor, materials, and equipment.