On January 1, 2014 the Accounts Receivable and the Allowance

question 26

Multiple Choice

On January 1, 2014 the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $30,000 and $500, respectively. During the year the company reported $75,000 of credit sales. There were $550 of receivables written-off as uncollectible in 2014. Cash collections of receivables amounted to $74,550. The company estimates that it will be unable to collect one percent (1%) of credit sales.
The entry to recognize the write-off of an uncollectible account will

• A) increase total assets and total equity.
• B) increase total assets and decrease total equity.
• C) decrease total assets and total equity.
• D) not affect total assets or total equity.

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Definitions:

Statistics Examinations

Tests or assessments that measure knowledge and understanding of statistical concepts and methods.

Variance

A measure of the spread between numbers in a dataset, indicating how much the individual data points differ from the mean of the data.

Confidence Interval

A segment of values, derived from analyzing a sample, that is likely to encapsulate the value of an undisclosed population attribute.

Sample Mean

The average of a subset of a population.