Use the Following to Answer Questions

question 4

Short Answer

Use the following to answer questions
On December 31,2015,the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible.Loudoun uses the allowance method of accounting for uncollectible accounts.In February 2016,one of Loudoun's customers failed to pay his $1,050 account and the account was written off.On April 4,2016,this customer paid Loudoun the $1,050.
-Assume that the Loudoun Corporation uses the direct write-off method of accounting for uncollectible accounts.Which of the following answers correctly describes the effect of the write-off of the customer's account on Lindley's financial statements?

---

Definitions:

Marginal Utility

The additional satisfaction or utility that a consumer gains from consuming one more unit of a good or service.

Income Distribution

The way in which total income is shared among individuals or groups within an economy.

Utilitarians

A group of philosophers who believe that the best action is the one that maximizes utility, often defined as the well-being of the greatest number of people.

Liberals

A political ideology emphasizing the importance of individual liberties, democracy, and supporting social and economic interventions to promote social justice.