A Company Has $90,000 in Outstanding Accounts Receivable and It

question 43

Multiple Choice

A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current debit balance (before adjustments) in the allowance for doubtful accounts is $800. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

• A) $4,600
• B) $5,400
• C) $6,200
• D) $6,800
• E) None of these

---

Definitions:

Instrumentality

The extent to which a tool or procedure is perceived as a means to achieve an end or a particular result.

Permanence

The state or quality of lasting or remaining unchanged indefinitely.

Social Exchange Theory

A theoretical perspective that explains social change and stability as a process of negotiated exchanges between parties.

Nonverbal Communication

is the transmission of messages or signals through a non-linguistic means, such as facial expressions, body language, and gestures.