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 Cash Net Realizable Value Accounts Payable + Stock Common Retained Statement of Cash + Earnings Revenue - Expense Net Income Flows a. NA NA NA NA NA NA NA NA 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 Cash Net Realizable Value Accounts Payable + Stock Common Retained Statement of Cash + Earnings Revenue - Expense Net Income Flows a. NA NA NA NA NA NA NA NA 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
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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
Cash
Net
Realizable
Value
Accounts
Payable + Stock
Common
Retained
Statement
of Cash
+ Earnings Revenue
-
Expense Net Income
Flows
a.
NA
NA
NA
NA
NA
NA
NA
NA
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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