[The Following Information Applies to the Questions Displayed Below

question 58

Multiple Choice

[The following information applies to the questions displayed below.]

On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050.

-Which of the following correctly states the effect of recording the collection of the reestablished receivable on April 4,Year 2?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Competitive Forces Model

A business framework devised by Michael Porter that analyzes competitiveness by recognizing five major forces that could endanger a company’s position.

Value Chain Model

Model that shows the primary activities that sequentially add value to the profit margin; also shows the support activities.

General Strategies

Refers to the broad methods or plans formulated by organizations or individuals to achieve major goals or objectives.

Differentiation

The act of making a product, service, or business stand out from its competitors by highlighting unique features or qualities.