In 2010, the Dugan Co

question 146

Multiple Choice

In 2010, the Dugan Co. had net credit sales of $750,000. On January 1, 2010, Allowance for Doubtful Accounts had a credit balance of $16,000. During 2010, $30,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivable basis) . If the accounts receivable balance at December 31 was $200,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2010?

• A) $20,000
• B) $34,000
• C) $36,000
• D) $30,000

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Definitions:

Skeptical Audience

A group of individuals who are inclined to question or doubt the information presented to them.

Knowledge-Management System

A technology-based system designed to capture, organize, and disseminate knowledge within an organization.

Centralized Database

A database located, stored, and maintained in a single location, accessible by users from different locations through a network.

Journalistic Approach

Verifying the completeness of a message by making sure it answers the who, what, when, where, why, and how questions.