At January 1, Davidson Services Has the Following Balances

question 94

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.
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:

Positive Reinforcement

The process of encouraging or establishing a pattern of behavior by offering rewards for desired behaviors.

Desirable Behaviour

Refers to actions or responses that are encouraged, rewarded, or sought after in a given context, particularly because they achieve positive outcomes.

Managers

Individuals who are responsible for directing and overseeing the work of a group of people in an organization.

Reinforcement Theory

A psychological concept suggesting that behavior can be controlled or modified through the use of rewards or punishments.