Darby Uses the Allowance Method to Account for Uncollectible Accounts

question 154

Multiple Choice

Darby uses the allowance method to account for uncollectible accounts.Its year-end unadjusted trial balance shows Accounts Receivable of $104,500,allowance for doubtful accounts of $665 (credit) and sales of $925,000.If uncollectible accounts are estimated to be .5% of sales,what is the amount of the bad debts expense adjusting entry?

• A)$4,625
• B)$3,960
• C)$5,290
• D)$4,750
• E)$4,825

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Definitions:

Stereotypes

Overgeneralized beliefs about a particular group or category of people that can lead to prejudiced attitudes and behaviors.

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Corrective Eye Surgery

Surgical procedures designed to correct refractive errors of the eye, such as myopia, hyperopia, and astigmatism, aiming to reduce dependence on eyeglasses or contact lenses.