Net Credit Sales for the Month Are $750,000

question 229

Multiple Choice

Net credit sales for the month are $750,000. The accounts receivable balance is $160,000. The allowance is calculated as 5% of the receivables balance using the percentage-of-receivables basis. If the Allowance for Doubtful Accounts has a credit balance of $5,000 before adjustment, what is the balance after adjustment?

• A) $ 8,000
• B) $ 3,000
• C) $13,000
• D) $ 8,250

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Definitions:

Form Utility

The value added to goods through a manufacturing process that changes the form of the product to make it more desirable to consumers.

Logistics Activity

The range of operations involved in the management of the flow of goods from the point of origin to the point of consumption to meet customer requirements.

Components

Parts or elements that make up a larger product or system.

Customer's Specifications

These are detailed requirements provided by the customer regarding the design, functionality, and performance of a product or service.