The Allowance for Uncollectible Accounts Has a Credit Balance of $500

question 104

True/False

The Allowance for Uncollectible Accounts has a credit balance of $500. The sales for the current year were $800,000, and the historical bad debt percentage has been 2% of sales. The adjusting journal entry amount should be $15,500 under the percent-of-sales method.

---

Definitions:

Goods and Services

The fundamental output of businesses to customers; goods are tangible items, whereas services are intangible offerings.

Market Potential

The maximum total sales volume that could be achieved by all firms in a market for a specific product or service over a given period, under ideal conditions.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, aiming to assess their relative purchasing power.

GDP Data

Statistical information that reflects the market value of all final goods and services produced within a country in a given period, used to analyze economic health.