Gross Accounts Receivable Is $12,000

question 75

Multiple Choice

Gross Accounts Receivable is $12,000.Allowance for Doubtful Accounts has a credit balance of $600.Net sales for the year are $100,000.In the past,2% of sales had proved uncollectible,and an aging of the receivables indicates $1,900 as uncollectible.What would be the adjusted balance of the Allowance account under the balance sheet approach?

• A)$2,000
• B)$1,400
• C)$2,500
• D)$1,900

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Definitions:

Minimum Resale Prices

Agreements or policies that set the lowest price at which a product may be resold, often used by manufacturers to maintain brand image or stabilize market price.

Vertical Agreements

Contracts between companies at different levels of the supply chain, such as between a manufacturer and a retailer.

Sherman Act

An antitrust law enacted in 1890 to combat monopolies and cartels, promoting fair competition for the benefit of consumers.

DOJ

The Department of Justice, a federal executive department of the U.S. government responsible for the enforcement of the law and administration of justice.