Bay Company Began Using the Allowance Method in 2014

question 133

Multiple Choice

Bay Company began using the allowance method in 2014. On January 1, 2014, Bay had a $3,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During 2014, Bay provided $25,000 of service on account. The company collected $21,000 cash from account receivable. Uncollectible accounts are estimated to be 2% of sales on account.
The balance in Accounts Receivable as of December 31, 2014 was

• A) $7,000.
• B) $4,000.
• C) $8,000.
• D) $500.

---

Definitions:

Fibromyalgia

A long-term syndrome characterized by widespread musculoskeletal pain, fatigue, and tender points on the body.

HIV Disease

A disease caused by the human immunodeficiency virus, which attacks the immune system, leading to life-threatening infections and diseases.

ADHD

Attention Deficit Hyperactivity Disorder, a chronic condition marked by persistent inattention, hyperactivity, and sometimes impulsivity.

Drug Companies

Businesses involved in the discovery, development, manufacturing, and marketing of medications.