A Year-End Review of Accounts Receivable and Estimated Uncollectible Percentages

question 94

Multiple Choice

A year-end review of Accounts Receivable and estimated uncollectible percentages revealed the following: At the end of the year,the credit balance in Allowance for Uncollectible Accounts was $1,000.Under the aging-of-receivables method,the Uncollectible-Account Expense at year-end is:

• A)$1,200.
• B)$6,300.
• C)$7,300.
• D)$8,300.

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Definitions:

Fair Market Value

The estimated price at which an asset or service would exchange hands between a willing buyer and seller, both having reasonable knowledge of the relevant facts.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate.

Common Stock

A type of security representing ownership in a corporation, with holders having a claim on part of the company’s assets and earnings.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.