On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050. Which of the following correctly states the effect of Loudoun's recording the reestablishment of the receivable on April 4, Year 2? Assets = Liab. + A. 1,050 ΝΑ 1,050 B. ΝΑ C. (1,050) ΝΑ D. ΝΑ ΝΑ Multiple Choice O Option A Option B Option C Stk. Equity (1,050) 1,050 (1,050) ΝΑ Rev. ΝΑ 1,050 ΝΑ ΝΑ Exp. = Net Inc. 1,050 ΝΑ 1,050 ΝΑ (1,050) 1,050 (1,050) ΝΑ Stmt of Cash Flows ΝΑ 1,050 OA ΝΑ ΝΑ

On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050. Which of the following correctly states the effect of Loudoun's recording the reestablishment of the receivable on April 4, Year 2? Assets = Liab. + A. 1,050 ΝΑ 1,050 B. ΝΑ C. (1,050) ΝΑ D. ΝΑ ΝΑ Multiple Choice O Option A Option B Option C Stk. Equity (1,050) 1,050 (1,050) ΝΑ Rev. ΝΑ 1,050 ΝΑ ΝΑ Exp. = Net Inc. 1,050 ΝΑ 1,050 ΝΑ (1,050) 1,050 (1,050) ΝΑ Stmt of Cash Flows ΝΑ 1,050 OA ΝΑ ΝΑ

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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