Netherland Corporation Has the Following Unadjusted Balances: Accounts Receivable,$80,000 (Debit),and

question 208

Multiple Choice

Netherland Corporation has the following unadjusted balances: Accounts Receivable,$80,000 (debit) ,and Allowance for Sales Discounts $300 (credit) .Of the receivables,$50,000 of them are within the 2% discount period,and Netherland expects buyers to take $1,000 in future-period discounts ($50,000 × 2%) arising from this period's sales.The adjusting entry or entries to estimate sales discounts is (are) :

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Definitions:

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Percentage of Sales Method

A financial forecasting model that bases future variables, like expenses and income, on a percentage of sales.

Matching Principle

A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.

Uncollectible Receivables

Accounts receivable that a company does not expect to collect due to customers’ inability to pay, often written off as a bad debt expense.