Abbott Company Uses the Allowance Method of Accounting for Uncollectible

question 106

Multiple Choice

Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates that 3% of credit sales will be uncollectible. On January 1, Allowance for Doubtful Accounts had a credit balance of $2,400. During the year, Abbott wrote off accounts receivable totaling $1,800 and made credit sales of $100,000. There were no sales returns during the year. After the adjusting entry, the December 31 balance in Bad Debt Expense will be

• A) $1,200
• B) $3,000
• C) $3,600
• D) $7,200

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Definitions:

Blood Glucose

The level of sugar present in the blood, crucial for managing energy supply in the body, significant for those with conditions like diabetes.

Carbohydrates

Organic compounds consisting of carbon, hydrogen, and oxygen, that are one of the main types of nutrients and a primary source of energy for the body.

Awkwardness Stage

A phase in relationship or interaction where discomfort or unease is felt, often due to unfamiliarity or challenge in communication.

Nutrition Counseling

A collaborative process wherein a health professional with expertise in nutrition helps a person to modify their diet for the improvement of overall health.