Powers Company Reported Net Sales of $1,200,000,average Accounts Receivable,net of $78,500,and

question 67

Multiple Choice

Powers Company reported net sales of $1,200,000,average Accounts Receivable,net of $78,500,and net income of $51,025.The Day's sales uncollected (rounded to whole days) is:

• A)24 days.
• B)15 days.
• C)4 days.
• D)562 days.
• E)48 days

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Definitions:

Direct Write-off Method

An accounting practice where uncollectible accounts receivable are written off to expense only when they are determined to be non-recoverable.

Adjustment

An entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate period.

Percent of Sales Method

A financial forecasting tool used to estimate certain balance sheet and income statement accounts based on a projected sales figure.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and are written off as a bad debt expense.