At January 1,Davidson Services Has the Following Balances: During

question 139

Multiple Choice

At January 1,Davidson Services has the following balances: During the year,Davidson has $104,000 of credit sales,collections of $100,000,and write-offs of $1,400. Davidson records Uncollectible account expense at the end of the year using the percent-of-sales method,and applies a rate of 1.1%,based on past history.
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Prior to the year-end entry to adjust the Uncollectible accounts expense,what is the balance in the Allowance for uncollectible accounts?

• A) Debit of $1,400
• B) Credit of $800
• C) Debit of $600
• D) Credit of $2,200

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Definitions:

Contributions

Amounts given or payments made towards a common goal, project, or for the benefit of a group.

Compounded Semi-annually

A method where interest is calculated and added to the principal amount twice a year.

Quarterly

Happening quarterly or four times annually.

Trust Fund

A legal arrangement through which assets are held by a third party for the benefit of another party or parties.