X Company Has the Following Accounting Balances at the End

question 158

Multiple Choice

X Company has the following accounting balances at the end of the year before adjustments: The company estimates that 2% of net sales will be uncollectible.After the correct adjusting entry has been made,which of the following is correct about Bad debts expense for the year and Allowance for uncollectible accounts at the end of the year?

• A)Bad debts expense will be $2,000 on the income statement and Allowance for uncollectible accounts will be $(3,000)on the balance sheet.
• B)Bad debts expense will be $3,000 on the income statement and Allowance for uncollectible accounts will be $(2,000)on the balance sheet.
• C)Bad debts expense will be $3,000 on the balance sheet and Allowance for uncollectible accounts will be $(3,000)on the income statement.
• D)Bad debts expense will be $1,000 on the income statement and Allowance for uncollectible accounts will be $(2,000)on the balance sheet.

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