Multiple Choice
[The following information applies to the questions displayed below.]
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 the adjusting entry,dated December 31,Year 1,on the elements of the financial statements of the Loudoun Corporation?![[The following information applies to the questions displayed below.] 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 the adjusting entry,dated December 31,Year 1,on the elements of the financial statements of the Loudoun Corporation? A) Option A B) Option B C) Option C D) Option D](https://d2lvgg3v3hfg70.cloudfront.net/TB6522/11ea8a6f_8d7a_0b07_a2a1_67e8b300ac08_TB6522_00.jpg)
A) Option A
B) Option B
C) Option C
D) Option D
Correct Answer:
Verified
Correct Answer:
Verified
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