Use This Information to Answer the Following Question

question 88

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 percentage of net sales method,the Allowance for Uncollectible Accounts balance (after adjustment) would be

• A)$8,880.
• B)$9,880.
• C)$10,880.
• D)$1,000.

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Definitions:

Average Daily Assets

The average value of assets held by an individual or entity over a specified period, calculated by averaging the asset values at the beginning and end of the period.

Mutual Fund

A financial tool that combines money from various investors to invest in a variety of assets including stocks, bonds, and money market instruments.

Turnover Ratio

A measure of the trading activity in a portfolio, indicating how often assets within the portfolio are bought and sold over a specific period.

Average Daily Assets

A measure used in finance to calculate the average value of assets held by a fund or company over a specific period.