The Following Information Is from the 2019 Records of Uptown

question 186

Multiple Choice

The following information is from the 2019 records of Uptown Antique Shop:

Bad debts expense is estimated by the percent-of-sales method.Management estimates that 3% of net credit sales will be uncollectible.The ending balance of the Allowance for Bad Debts account after adjustment will be ________.

• A)$6,900
• B)$4,740
• C)$7,740
• D)$3,900

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Definitions:

Cash Dividends

Distributions of a corporation's earnings to shareholders as a return on their investment, typically in the form of cash.

Asset Balances

The values of all the assets that a company has listed on its balance sheet, these values are assessed at the end of a reporting period.

Net Income

The profit a company has after deducting all its expenses from its total revenues, also known as the bottom line.

Paid Dividends

Cash or other assets distributed to shareholders out of the company's earnings.