Before Adjustment,the Allowance for Doubtful Accounts Has a Credit Balance

question 77

Multiple Choice

Before adjustment,the allowance for doubtful accounts has a credit balance of $2,700.The company had $140,000 of net credit sales during the period and historically fails to collect 4% of credit sales.The company uses the percentage of credit sales method of estimating doubtful accounts.After adjusting for estimated bad debts,the new balance in the allowance for doubtful accounts account will be:

• A)$8,300.
• B)$5,400.
• C)$2,900.
• D)Cannot be determined from the information given.

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Definitions:

Left Hemisphere

The left side of the human brain, often associated with analytical thought, logic, language, and mathematical processes.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It regulates basic emotions and drives.

Somatosensory Area

A region of the cerebral cortex involved in processing sensory information from the body, including touch, temperature, and pain.

Stroke

A medical condition where poor blood flow to the brain results in cell death, leading to potential physical and cognitive impairments.