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

question 138

Multiple Choice

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

• A) $1,500.
• B) $4,100.
• C) $5,300.
• D) $6,300.

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Definitions:

Net Loss

The amount by which total expenses exceed total revenues in a given period, indicating a company is not profitable.

Drawings

Withdrawals made by the owner of a business from the company's earnings or assets for personal use.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.

Consulting Revenues

Income earned by a company for providing professional advice or services to other organizations or individuals.