Using the Following Information: During 2018, Sales on Account

question 114

Multiple Choice

Using the following information: During 2018, sales on account were $145,000 and collections on account were $100,000. Also during 2018, the company wrote off $4,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that uncollectible accounts should be estimated at $40,000.
Bad debt expense for 2018 is

• A) $4,000.
• B) $5,000.
• C) $9,000
• D) $40,000.

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Definitions:

Interest Income

Earnings generated from the lending of money or from deposit funds in interest-bearing accounts.

Eligible Dividends

Dividends designated by a corporation to be eligible for a lower tax rate on the dividend income received by an individual shareholder.

Tax Paid

Refers to the total amount of taxes remitted to the relevant tax authorities for income, sales, property, or other forms of taxes.

Cash Flow

The total amount of money being transferred into and out of a business, representing its operating, investing, and financing activities.