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

question 226

Multiple Choice

Using the percentage-of-receivables basis the uncollectible accounts for the year is estimated to be $33000. If the balance for the Allowance for Doubtful Accounts is a $5000 credit before adjustment what is the amount of bad debt expense for the period?

• A) $5000
• B) $28000
• C) $33000
• D) $38000

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Definitions:

Lot

A distinct batch or quantity of material bought or sold, often considered as a single unit in stock trading or production.

Purchase Price

The cost at which something is bought, which may include additional fees or taxes involved in the transaction.

Material Cost

The expense incurred in acquiring the raw materials needed to produce a good or deliver a service.

Holding Cost

Holding cost is the expense associated with storing unsold goods or items held in inventory over a certain period, including warehousing, insurance, and depreciation costs.