The Following Information Is from the 2013 Records of Armadillo

question 150

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 aging-of-accounts-receivable method.Management estimates that $2,850 of accounts receivable will be uncollectible.Which of the following will be the balance of the Allowance for uncollectible accounts after adjustment?

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

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Definitions:

Customer Service Level

A measure of the quality of service provided to customers, often reflecting the ability to meet customer needs and resolve issues.

Stockout

A situation that occurs when an item is not in stock and unavailable for sale or use, often leading to lost sales or customer dissatisfaction.

Lost Sale

A potential sale that is not realized, often due to stockouts or inability to meet customer demand.

Salvage Value

The estimated resale value of an asset at the end of its useful life, often considered for depreciation calculations.