Abbott Company Uses the Allowance Method of Accounting for Uncollectible

question 137

Multiple Choice

Abbott Company uses the allowance method of accounting for uncollectible accounts.Abbott estimates that 3% of net credit sales will be uncollectible.On January 1,the Allowance for Doubtful Accounts had a credit balance of $2,400.During the year,Abbott wrote off accounts receivable totaling $1,800 and made credit sales of $100,000.There were no sales returns or sales discounts during the year.After the adjusting entry,the December 31,balance in the Bad Debt Expense will be

• A)$1,200
• B)$3,000
• C)$3,600
• D)$7,200

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Definitions:

Indra Nooyi

Former CEO of PepsiCo and a highly influential business leader.

PepsiCo

A multinational food, snack, and beverage corporation known for products like Pepsi, Lay's, and Quaker.

Ethics Competency

The ability to understand and apply moral principles and standards to one's behavior and decisions in a work environment.

KSAs

Stands for Knowledge, Skills, and Abilities; these are the attributes required to perform a job and are used to match candidates with job requirements.