TB MC Qu. 07-68 (Static) On December 31, Year 1, the Loudoun Corporation... 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 Company writing off the customer's account? Balance Sheet =Liabilities+ Stockholders' Equity Income Statement Assets Net Realizable Accounts Common Cash + Value Payable + Stock a. NA NA NA NA Retained + Earnings NA Statement of Cash Revenue NA Expense = Net Income NA NA Flows NA b. NA (1,050) NA NA (1,050) (1,050) NA (1,050) NA C. NA (1,050) (1,050) NA NA NA NA NA NA d. NA NA 1,050 (1,050) NA NA (1,050) (1,050) NA Multiple Choice Option A ○ Option D
TB MC Qu. 07-68 (Static) On December 31, Year 1, the Loudoun Corporation... 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 Company writing off the customer's account? Balance Sheet =Liabilities+ Stockholders' Equity Income Statement Assets Net Realizable Accounts Common Cash + Value Payable + Stock a. NA NA NA NA Retained + Earnings NA Statement of Cash Revenue NA Expense = Net Income NA NA Flows NA b. NA (1,050) NA NA (1,050) (1,050) NA (1,050) NA C. NA (1,050) (1,050) NA NA NA NA NA NA d. NA NA 1,050 (1,050) NA NA (1,050) (1,050) NA Multiple Choice Option A ○ Option D
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Haresh
Transcribed Image Text:TB MC Qu. 07-68 (Static) On December 31, Year 1, the Loudoun Corporation...
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 Company writing off the customer's account?
Balance Sheet
=Liabilities+ Stockholders' Equity
Income Statement
Assets
Net
Realizable
Accounts
Common
Cash
+ Value
Payable +
Stock
a.
NA
NA
NA
NA
Retained
+ Earnings
NA
Statement
of Cash
Revenue
NA
Expense = Net Income
NA
NA
Flows
NA
b.
NA
(1,050)
NA
NA
(1,050)
(1,050)
NA
(1,050)
NA
C.
NA
(1,050)
(1,050)
NA
NA
NA
NA
NA
NA
d.
NA
NA
1,050
(1,050)
NA
NA
(1,050)
(1,050)
NA
Multiple Choice
Option A
○ Option D
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