Question

During the accounting period, Ourso Company recorded $12,200 of sales revenue on account and wrote off a $152 accounts receivable. From the given information, what is the amount of uncollectible accounts expense recognized during the period?

A) $56
B) $181
C) $27
D) $152

Answer 1

The amount of uncollectible accounts expense for Ourso Company cannot be determined from the provided information, as the method for estimating the expense is not specified.

Step-by-step explanation:

The amount of uncollectible accounts expense recognized during the period cannot be determined from the information provided. The write-off of a $152 accounts receivable simply removes that amount from the accounts receivable balance and is recorded against the allowance for doubtful accounts. It does not directly affect the uncollectible accounts expense. The expense is typically estimated using a method such as a percentage of sales or accounts receivable, and this estimation method is not provided in the question. Therefore, none of the options provided (A) $56 (B) $181 (C) $27 (D) $152 correctly represent the uncollectible accounts expense recognized during the period based solely on the information given.

Using a self-check question for comparison: A firm had sales revenue of $1 million last year. It spent $600,000 on labor, $150,000 on capital, and $200,000 on materials. The firm's accounting profit would be calculated by subtracting these explicit costs from the total revenues, yielding an accounting profit of $50,000.