A Company Has an Ending Accounts Receivable Balance of $900,000

question 114

Multiple Choice

A company has an ending accounts receivable balance of $900,000 and it estimates that uncollectible accounts will be 2% of the receivable balance. If Allowance for Doubtful Accounts has a credit balance of $2,000 prior to adjustment, its balance after adjustment will be a credit of

• A) $20,000.
• B) $18,000.
• C) $17,960.
• D) $16,000.

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Definitions:

Groundwater Mining

The process of extracting water from underground aquifers at a rate faster than the natural recharge, leading to depletion or diminishing of groundwater resources.

Atmospheric Carbon

Gaseous carbon compounds, such as carbon dioxide, present in the atmosphere, significantly affecting the Earth's climate.

Sedimentary Cycle

A biogeochemical cycle that involves the movement and processing of sediment materials across the Earth's surface and crust.

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize foods from carbon dioxide and water, involving the release of oxygen as a byproduct.