On January 1,Five Star Services Has the Following Balances: Accounts

question 186

Multiple Choice

On January 1,Five Star Services has the following balances: Accounts Receivable $26,000 (debit)
Bad Debts Expense $0
Five Star Services has the following transactions during January: Credit sales of $100,000,collections of credit sales of $87,000,and write-offs of $18,000.Five Star Services uses the direct write-off method.At the end of January,the balance of Accounts Receivable is ________.

• A) $15,660
• B) $21,000
• C) $20,690
• D) $39,000

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Definitions:

Conversion Costs

The costs incurred to convert raw materials into finished products, typically including labor and manufacturing overhead.

Finished Goods

Refers to products that have completed the manufacturing process but have not yet been sold to customers.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor.

Customer Profitability

An analysis to determine the financial contribution brought by a customer through their purchases minus the costs of servicing them.