The Following Information Is from the 2015 Records of Armand

question 56

Multiple Choice

The following information is from the 2015 records of Armand Camera Shop: $$\begin{array} { | l | r | } \hline \text { Accounts Receivable, December 31,2015 } & \$ 40,000 \text { (debit) } \\\hline \begin{array} { l } \text { Allowance for Bad Debts, December 31,2015 } \\\text { prior to adjustment }\end{array} & 1,500 \text { (debit) } \\\hline \text { Net credit sales for 2015 } & 175,000 \\\hline \text { Accounts written off as uncollectible during 2015 } & 15,000 \\\hline \text { Cash sales during 2015 } & 27,000 \\\hline\end{array}$$ Bad debts expense is estimated by the percent-of-sales method. Management estimates that 3% of net credit sales will be uncollectible. The balance of the Allowance for Bad Debts after adjustment will be:

• A) $7,000.
• B) $3,450.
• C) $2,850.
• D) $3,750.

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Definitions:

Scandals

Events or actions that cause public outrage or shock due to perceived ethical, legal, or moral infractions.

Discretionary Responsibility

The voluntary obligation or duty of an organization to contribute to the welfare of the broader community.

Economic, Legal, Ethical Expectations

Standards and norms guiding behavior in regards to financial operations, adherence to laws, and moral principles in business or personal conduct.

Well-Being

The state of being comfortable, healthy, or happy, reflecting the overall quality of an individual's life.