The Allowance for Uncollectible Accounts Currently Has a Debit Balance

question 148

Multiple Choice

The Allowance for uncollectible accounts currently has a debit balance of $200.The company's management estimates that 2.5% of net credit sales will be uncollectible.Net credit sales are $115,000.What will be the amount of Uncollectible accounts expense reported on the income statement?

• A) $2,675
• B) $2,875
• C) $3,275
• D) $3,075

Recognize the appropriate journals for recording various types of transactions.

Describe and analyze e-commerce.

Understand the process of recording transactions in ledgers and subsidiary ledgers.

Conduct horizontal and vertical analyses on segment data or financial statements.

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Definitions:

Income

The monetary payment received for one's work, investments, or other sources, primarily used for personal consumption, savings, and investment.

Present Value

The present value of an expected amount of money or sequence of cash flows, with a given return rate.

Interest Rate

The percentage at which interest is paid by borrowers for the use of money they borrow from a lender.

Consumption

The process by which goods and services are used up or consumed by individuals or groups, typically leading to satisfaction of needs or wants.