Starlight Ltd

question 48

Multiple Choice

Starlight Ltd.assigned $600,000 of Accounts Receivable to Moonbeam Management as security for a loan of $580,000.Moonbeam charged a 3% commission on the amount of the loan; the interest rate on the note was 10%.During the first month, Starlight collected $320,000 of the assigned accounts, after deducting $500 of discounts.As well, Starlight accepted returns worth $2,600 and wrote off assigned accounts totalling $4,500.Entries made by Starlight during the first month would include a

• A)debit to Cash of $322,600.
• B)debit to Bad Debts Expense of $4,500.
• C)debit to Allowance for Doubtful Accounts of $4,500.
• D)debit to Accounts Receivable of $324,500.

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Definitions:

Cataract

Complete or partial opacity of the lens of the eye.

Lens of the Eye

A transparent structure behind the iris of the eye that helps to refract light to be focused on the retina.

Acute Central Vision

Acute central vision refers to the component of vision that is responsible for sharp, detailed vision in the direct line of sight.

External Auditory Canal

The tube that connects the outer ear to the eardrum, allowing sound waves to enter the ear.