The Following Information Is from the 2013 Records of Armadillo

question 62

Multiple Choice

The following information is from the 2013 records of Armadillo Camera Shop: 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 balance of the Allowance for uncollectible accounts after adjustment?

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

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Definitions:

Financial Statement

An official documentation detailing the fiscal transactions and status of a company, individual, or another entity.

Retention Ratio

The portion of net income that is retained by a corporation rather than distributed to its shareholders as dividends.

EBIT

Profit measurement called Earnings Before Interest and Taxes, which encompasses all of a business's expenditures apart from interest and taxes.

Tax Rate

The portion of financial income that lawmakers decree as taxable for corporations or individuals.