At the End of 2012, Murray State Lenders Had a Balance

question 113

Multiple Choice

At the end of 2012, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (credit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2012, to record its estimated uncollectible accounts included a:

• A) Credit to Allowance for Uncollectible Accounts of $12,000.
• B) Debit to Bad Debt Expense of $7,500.
• C) Credit to Allowance for Uncollectible Accounts of $7,500.
• D) Both b and c.

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Definitions:

Revenue

Revenue is the total amount of money received by a company for goods sold or services provided during a certain period of time, before any expenses are deducted.

Expenditures

The total amount of money spent by a household or country on consumption and services.

Diagram

A graphical representation of information or data, typically used to visualize complex relationships or processes.

Consumer Expenditures

The total amount of money spent by consumers on goods and services in a given period.