The Following Information Is from the 2013 Records of Armadillo

question 163

Multiple Choice

The following information is from the 2013 records of Armadillo Camera Shop: Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method. Management estimates that $2,850 of accounts receivable will be uncollectible. Which of the following will be the balance of the Allowance for uncollectible accounts after adjustment?

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

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Definitions:

Overhead Applied

A portion of overhead costs assigned to a particular cost object based on a predetermined rate.

Direct Labor Efficiency Variance

The difference between the budgeted amount of direct labor required to produce an output and the actual direct labor used.

Favorable

A term used in budgeting and finance to indicate results that are better than expected, such as lower costs or higher revenues.

Unfavorable

A term used to describe outcomes or variances that negatively impact financial performance or expectations.