Use This Information to Answer the Following Question

question 44

Multiple Choice

Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $100,000.Allowance for Uncollectible Accounts has a credit balance of $2,000.Net sales for the year were $1,000,000.In the past,2 percent of sales have proved uncollectible,and an aging of accounts receivable accounts results in an estimate of $27,000 of uncollectible accounts.
Using the accounts receivable aging method,the Allowance for Uncollectible Accounts balance (after adjustment) would be

• A) $29,000.
• B) $28,000.
• C) $27,000.
• D) $25,000.

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Definitions:

Government Spending

The total expenditure by the government on goods and services, including salaries of public servants, public investments, and social services.

Tax Increases

A rise in the rate of taxes imposed by governments on individuals or businesses.

Inflationary Gap

A situation where the total demand for goods and services exceeds the total supply at current prices, leading to upward pressure on prices and inflation.

Full Employment GDP

The level of gross domestic product achieved when the economy is fully employing all available labor and resources, maximizing output.