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kozerog [31]
4 years ago
13

Gross Accounts Receivable is $12,000. Allowance for Doubtful Accounts has a credit balance of $600. Net sales for the year are $

100,000. In the past, 2% of sales had proved uncollectible, and an aging of the receivables indicates $1,900 as uncollectible. What would be the adjusted balance of the Allowance account under the balance sheet approach? A. $2,000 B. $1,400 C. $2,500 D. $1,900
Business
1 answer:
alexandr1967 [171]4 years ago
5 0
Under the balance sheet approach, the adjusted balance of the Allowance for Doubtful Accounts should be based on the aging of the receivables. The aging of the receivables provides<span> the amount of uncollectible receivable (ending balance). Therefore, the adjusting balance of ADA would be $1,900.</span>
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If he was deriving more satisfaction from one of the two, we could say that he should buy more of that item to maximize his satisfaction. But this is not the case.

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