Allowance for Doubtful Accounts Has a Debit Balance of $700

question 19

Multiple Choice

Allowance for Doubtful Accounts has a debit balance of $700 at the end of the year, before adjustments. Sales for the year amounted to $920,000, sales discounts amounted to $31,200 and sales returns and allowances amounted to $42,300.
- If the uncollectible accounts expense is estimated at 2% of net sales, the amount of the adjusting entry to record the estimated losses from uncollectible accounts will be

• A)$16,930
• B)$16,230
• C)$18,400
• D)$17,630

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Definitions:

Activity-Based Management

A management approach focusing on managing activities as the route to improving the value received by the customer and the profit achieved by providing this value.

Employee Resistance

Opposition or pushback from employees towards changes within an organization, often due to fear of the unknown or perceived negative impacts.

Resources Required

The necessary inputs or assets needed to complete a task, project, or production, including time, money, and materials.

Target Costing

A pricing method that involves subtracting a desired profit margin from a competitive market price to determine allowable production costs.