False Value Hardware Began 2018 with a Credit Balance of $32,000

question 101

Multiple Choice

False Value Hardware began 2018 with a credit balance of $32,000 in the allowance for sales returns account. Sales and cash collections from customers during the year were $650,000 and $610,000, respectively. False Value estimates that 6% of all sales will be returned. During 2018, customers returned merchandise for credit of $28,000 to their accounts.
- What is the balance in the allowance for sales returns account at the end of 2018?

• A) $11,000.
• B) $39,000.
• C) $43,000.
• D) $21,000.

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Definitions:

Fair Competition

A principle of marketplace ethics and law that ensures businesses compete on a level playing field, without engaging in deceitful, unfair, or monopolistic practices.

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