The General Ledger Account for Accounts Receivable Shows a Debit

question 162

Short Answer

The general ledger account for Accounts Receivable shows a debit balance of $50,000.Allowance for Uncollectible Accounts has a credit balance of $3,000.Net sales for the year were $500,000.In the past,3 percent of sales have proved uncollectible,and an aging of accounts receivable resulted in an estimate of $20,000 of uncollectible accounts receivable.
Using the accounts receivable aging method,the entry to record the Uncollectible Accounts Expense is:
a.Uncollectible Accounts Expense 21,500
Allowance for Uncollectible Accounts 21,500
b.Uncollectible Accounts Expense 17,000
Allowance for Uncollectible Accounts 17,000
c.Uncollectible Accounts Expense 20,000
Allowance for Uncollectible Accounts 20,000
d.Uncollectible Accounts Expense 23,000
Allowance for Uncollectible Accounts 23,000

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Definitions:

Mission

The core purpose or fundamental goal of an organization or group, typically reflecting its values and aspirations.

Objectives

Specific, measurable, achievable, relevant, and time-bound goals that an individual or organization aims to achieve.

Vertical Division of Labour

The categorization of tasks in an organizational hierarchy where tasks are assigned based on level of authority and expertise, from top to bottom.

Differentiation

The tendency for managers in separate units, functions, or departments to differ in terms of goals, time spans, and interpersonal styles.