The General Ledger Account for Accounts Receivable Shows a Debit $\begin{array}{ll}\text { Uncollectible Accounts Expense } & 6,000 \\\text { Allowance for Uncollectible Accounts } &&6,000\end{array}$

question 170

Multiple Choice

The general ledger account for Accounts Receivable shows a debit balance of $25,000.Allowance for Uncollectible Accounts has a credit balance of $1,500.Net sales for the year were $250,000.In the past,3 percent of sales have proved uncollectible,and an aging of accounts receivable resulted in an estimate of $10,000 of uncollectible accounts receivable. Using the percentage of net sales method,the entry to record the Uncollectible Accounts Expense is:

• A) \(\begin{array}{ll}
• \text { Uncollectible Accounts Expense } & 6,000 \\
• \text { Allowance for Uncollectible Accounts } &&6,000
• \end{array}\)
• B) \(\begin{array}{ll}
• \text { Uncollectible Accounts Expense } & 7,500 \\
• \text { Allowance for Uncollectible Accounts } &&7,500
• \end{array}\)
• C) \(\begin{array}{ll}
• \text { Uncollectible Accounts Expense } & 9,000 \\
• \text { Allowance for Uncollectible Accounts } &&9,000
• \end{array}\)
• D) \(\begin{array}{ll}
• \text { Uncollectible Accounts Expense } &10,000 \\
• \text { Allowance for Uncollectible Accounts } &&10,000
• \end{array}\)

---

Definitions:

Minimum-wage Laws

Legislation that sets the lowest hourly wage rate that can be paid to workers, intended to protect employees from unduly low pay.

Labor Force

The total number of people employed and unemployed, actively seeking work in an economy.

Equilibrium Level

The state in which market supply and demand balance each other, resulting in stable prices and quantities.

Unemployment

The situation when people who are willing to work at prevailing wage rates cannot find jobs.