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A Company Has Net Sales of $100,000 During the Year

question 14

Essay

A company has net sales of $100,000 during the year.At year end (before an adjustment is made),Allowance for Uncollectible Accounts has a credit balance of $5,000.If the company estimates that 3 percent of net sales are uncollectible and the company uses percentage of net sales method,what is the balance in the allowance account after the year-end adjustment has been made?
a.$3,000 debit balance
b.$3,000 credit balance
c.$8,000 credit balance
d.$2,000 debit balance


Definitions:

Standard Deviation

A statistical measure of the dispersion or variability in a set of data, often used in finance to gauge the volatility of an investment.

Skewness

A measure of the asymmetry of the probability distribution of a real-valued random variable, indicating how much the distribution leans to the left or right of the mean.

Distribution

The process of making a product or service available for use or consumption by a consumer or business user.

Effective Annual Rate

The real return on an investment, considering the effect of compounding interest over a period, typically one year.

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