The Following Information Is from the 2013 Records of Armadillo

question 116

Multiple Choice

The following information is from the 2013 records of Armadillo Camera Shop: $$\begin{array} { | l | r | } \hline \text { Accounts receivable, December 31,2013 } & \$ 20,000 \text { (debit) } \\\hline \begin{array} { l } \text { Allowance for uncollectible accounts, December 31,2013 } \\\text { prior to adjustment }\end{array} & 600 \text { (debit) } \\\hline \text { Net credit sales for 2013 } & 95,000 \\\hline \text { Accounts written off as uncollectible during 2013 } & 7,000 \\\hline \text { Cash sales during 2013 } & 27,000 \\\hline\end{array}$$
- Uncollectible accounts expense is estimated by the percent-of-sales method.Management estimates that 3% of net credit sales will be uncollectible.Which of the following will be the amount of Uncollectible accounts expense?

• A) $7,000
• B) $3,450
• C) $2,250
• D) $2,850

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Definitions:

Discrete Random Variables

Random variables that take on a countable number of distinct values.

Continuous Random Variables

Variables that can take on any values within a continuous range, as opposed to discrete variables that have specific, separate values.

Normal Distribution

It's a probability distribution where the frequency of data decreases as the distance from the mean increases, exhibiting symmetry about the mean.

Standard Deviation

A statistical measure that quantifies the dispersion or spread of a set of data points around their mean.