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 recording the collection of the reestablished receivable on April 4, Year 2? Income Statement Statement of Cash A. B. C. D. Assets 1,050 (1,050) 1,050 1,050 1,050 (1,050) Multiple Choice Option B Balance Sheet =Liabilities + ΝΑ ΝΑ ΝΑ ΝΑ Stockholders' Equity ΝΑ 1,050 1,050 ΝΑ Revenue NA 1,050 ΝΑ ΝΑ Net Expense = Income ΝΑ ΝΑ 1,050 1,050 ΝΑ ΝΑ (1,050) ΝΑ Flows NA 1,050 OA 1,050 OA 1,050 OA

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 recording the collection of the reestablished receivable on April 4, Year 2? Income Statement Statement of Cash A. B. C. D. Assets 1,050 (1,050) 1,050 1,050 1,050 (1,050) Multiple Choice Option B Balance Sheet =Liabilities + ΝΑ ΝΑ ΝΑ ΝΑ Stockholders' Equity ΝΑ 1,050 1,050 ΝΑ Revenue NA 1,050 ΝΑ ΝΑ Net Expense = Income ΝΑ ΝΑ 1,050 1,050 ΝΑ ΝΑ (1,050) ΝΑ Flows NA 1,050 OA 1,050 OA 1,050 OA

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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