Eyewear Unlimited Has Accounts Receivable of $16,000 and an Allowance $\begin{array} { | c | c | } \hline \text { Before } & \text { After } \\\hline \$ 16,000 & \$ 14,240 \\\hline\end{array}$

question 40

Multiple Choice

Eyewear Unlimited has accounts receivable of $16,000 and an allowance for doubtful accounts with a credit balance of $1,700 before a specific account of $60 is written off. What were net accounts receivable before and after the write-off?

• A) \(\begin{array} { | c | c | }
• \hline \text { Before } & \text { After } \\
• \hline \$ 16,000 & \$ 14,240 \\
• \hline
• \end{array}\)
• B) \(\begin{array} { | c | c | }
• \hline \text { Before } & \text { After } \\
• \hline \$ 16,000 & \$ 16,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array} { | c | c | }
• \hline \text { Before } & \text { After } \\
• \hline \$ 14,300 & \$ 14,240 \\
• \hline
• \end{array}\)
• D) \(\begin{array} { | c | c | }
• \hline \text { Before } & \text { After } \\
• \hline \$ 14,300 & \$ 14,300 \\
• \hline
• \end{array}\)

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Definitions:

Nominal Annual Cost

The stated annual cost of borrowing or investing, without adjusting for the compounding of interest or for inflation.

Non-Free Trade Credit

Credit arrangements that come with conditions or costs, unlike free trade credit which has no interest or fees for a certain period.

Net Purchases

Net purchases are the total amount of purchases made by a business after subtracting returns, allowances, and discounts.

Cash Conversion Cycle

A measurement that calculates the duration required for a business to transform its inventory investments and additional resources into cash flows resulting from sales.