The Following Information Is from the 2013 Records of Armadillo

question 158

Multiple Choice

The following information is from the 2013 records of Armadillo Camera Shop: $\begin{array}{|l|r|}\hline\text { Accounts receivable, December 31,2013 } & \$ 20,000 \text { (debit) } \\\hline \text { Net credit sales for 2013 } & 95,000 \\\hline \text { Accounts written off as uncollectible during 2013 } & 7,000 \\\hline \text { Cash sales during 2013 } & 27,000 \\\hline\end{array}$ Uncollectible accounts expense is determined by the direct write-off method.Which of the following will be the amount of Uncollectible accounts expense?

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

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Definitions:

Interest in Land

Legal rights or investments in real property, including ownership or usage rights.

Main-Purpose Rule

A legal principle that if the main purpose of a guarantor to sign a surety agreement is to secure a personal benefit, the agreement does not have to be in writing to be enforceable.

Secondary Obligation

An obligation that arises indirectly or as a result of another primary obligation, often in legal or financial contexts.

Statute of Frauds

A legal concept that requires certain types of contracts to be written and signed to be enforceable.