The Following Information Pertains to Lightning Inc A)$600
B)$1,000

question 63

Multiple Choice

The following information pertains to Lightning Inc. ,at the end of the year: Lightning uses the percentage-of-credit-sales method and estimates 1% of sales are uncollectible.What is the ending balance of the allowance account after the year-end adjustment?
$$\begin{array} { | l | r | l | } \hline \text { Credit Sales } & \$ 60,000 & \\\hline \text { Accounts Payable } & 10,000 & \\\hline \text { Accounts Receivable } & 7,000 & \\\hline \begin{array} { l } \text { Allowance for Uncollectible } \\\text { Accounts }\end{array} & 400 & \text { credit } \\\hline \text { Cash Sales } & 20,000 & \\\hline\end{array}$$

• A)$600.
• B)$1,000.
• C)$200.

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Definitions:

P < 0.05

A statistical threshold indicating that the observed results are significant with a probability of less than 5% being due to chance.

Obtained Value

The actual value measured or computed from a data set or experiment, often compared against a theoretic or critical value in hypothesis testing.

Population Standard Deviation

The population standard deviation is a measure of the dispersion or spread of a set of values within a population, quantifying how much the values differ from the population mean.

Square Root

A value that, when multiplied by itself, gives the original number, representing the inverse operation of squaring.