Management Estimates the Company's Allowance for Doubtful Accounts as $200,000,and

question 38

Multiple Choice

Management estimates the company's allowance for doubtful accounts as $200,000,and the auditors develop an estimate that suggests that the amount should be between $230,000 and $250,000.The factual misstatement in this situation is:

• A)$0.
• B)$30,000.
• C)$40,000.
• D)$50,000.

---

Definitions:

General Journal

A ledger where double-entry accounting transactions are initially recorded, including details such as date, accounts affected, and amounts.

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, used to prepare financial statements.

Inventory

The total amount of goods and materials a business holds for the purpose of resale or production.

Balance Sheet Column

Part of a financial statement that displays the company's assets, liabilities, and shareholders' equity at a specific point in time.