A Company Has Net Sales of $50,000 During the Year

question 1

Multiple Choice

A company has net sales of $50,000 during the year.At year end (before an adjustment is made) ,Allowance for Uncollectible Accounts has a credit balance of $2,500.If the company estimates that 3 percent of net sales are uncollectible,what is the balance in the allowance account after the year-end adjustment has been made using the percentage of net sales method?

• A)$1,500 debit balance
• B)$1,500 credit balance
• C)$4,000 credit balance
• D)$1,000 debit balance

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