A Company Has $286,000 in Credit Sales

question 52

Multiple Choice

A company has $286,000 in credit sales.The company uses the allowance method to account for uncollectible accounts.The Allowance for Doubtful Accounts now has a $2,280 credit balance.If the company estimates that $7,640 of accounts will be uncollectible based on an aging of Accounts Receivable,what will be the amount of the journal entry to record estimated uncollectible accounts?

• A)$7,640
• B)$9,920
• C)$4,560
• D)$5,360

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Definitions:

Recession

A noticeable drop in economic performance affecting the entire economy, enduring longer than several months, usually evident in real GDP, real income, employment, industrial output, and wholesaleretail sales.

Variance

A statistical measurement of the spread between numbers in a data set, indicating how much the numbers differ from the average.

Variance

In statistics, the measure of dispersion within a data set, representing the average of the squared differences from the mean.

Recessionary Period

A phase in the business cycle where the economy declines and is marked by reduced industrial activity, widespread unemployment, and falling prices or stagnant growth.