AT&U Company
Data for the Year Ended December 31, Year

question 115

Multiple Choice

AT&U Company
Data for the year ended December 31, Year 1, are presented below:
$\begin{array}{llr} \text { Sales (credit) } &\$2,500,000\\ \text { Sales returns and allowances } &50,000\\ \text { Accounts receivable (December 31, Year 1) } &640,000\\ \text { Allowance for doubtful accounts} &\\ \text { (before adjustment at December 31, Year 1) } &20,000\\ \text {Estimated amount of uncollected accounts based on aging analysis } &45,000\\\end{array}$

-Refer to the figure AT&U Company.If the company estimates its bad debts at 1% of net credit sales,what amount will be reported as bad debt expense for Year 1?

• A) $4,500
• B) $24,500
• C) $25,000
• D) $44,500

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Definitions:

Profitability

The degree to which a business or activity yields profit or financial gain.

Learning Organization

An organization that has systems and processes for creating, acquiring, and transferring knowledge to modify and change its behavior to reflect new knowledge and insights.

Knowledge Acquisition

The process of learning and obtaining information or skills, often discussed in the context of personal development or artificial intelligence.

Knowledge Management

The process of creating, sharing, using, and managing the knowledge and information of an organization, to enhance learning and performance.