Use This Information to Answer the Following Question

question 55

Multiple Choice

Use this information to answer the following question. The general ledger account for Accounts Receivable shows a debit balance of $50,000. Allowance for Uncollectible Accounts has a credit balance of $1,000. Net sales for the year were $500,000. In the past, 2 percent of sales have proved uncollectible, and an aging of accounts receivable accounts results in an estimate of $13,500 of uncollectible accounts.
Using the accounts receivable aging method, the Allowance for Uncollectible Accounts balance (after adjustment) would be

• A) $14,500.
• B) $14,000.
• C) $13,500.
• D) $12,500.

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Definitions:

Think Outside The Box

Adopting an innovative and unconventional approach to problem-solving or creativity.

Situational Creativity Drivers

Factors in the environment that enhance or stimulate creative thinking and innovation in specific situations.

Organizational Culture

The common ethos, ideologies, and mores that guide the behavior, emotions, and thoughts of staff members in a business setting.

Three-Component Model

A framework that describes an aspect of analysis or understanding composed of three interrelated elements.