At 1 January, Davidson Services Has the Following Balances

question 13

Multiple Choice

At 1 January, Davidson Services has the following balances: During the year, Davidson had $104 000 of credit sales, collections of $100 000, and write- offs of $1 400. Davidson records Uncollectible Account Expense at the end of the year using the percentage- of- sales method, and applies a rate of 1.1%, based on past history.
After the year- end entry to adjust the Bad debts expense, what is the ending balance in the Bad debts expense?

• A)Debit of $1 400
• B)Debit of $1 144
• C)Credit of $544
• D)Credit of $1 944

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Definitions:

Consumer Journey

The complete experience a customer goes through when interacting with a brand or product, from awareness to purchase and beyond.

Promotional Element

A component of the marketing mix that involves activities to increase awareness, interest, and sales of a product or service, such as advertising, sales promotions, and public relations.

Product Life Cycle

Describes the stages a product goes through from when it is first introduced into the market until it declines or is removed from the market; the stages include introduction, growth, maturity, and decline.

Promotional Mix

The blend of different marketing strategies and tactics – such as advertising, public relations, personal selling, and sales promotion – used to reach the target audience, create awareness, and generate sales or achieve marketing objectives.