Aspen Corporation Data for Aspen Corporation for the Year Ended December 31

question 86

Multiple Choice

Aspen Corporation
Data for Aspen Corporation for the year ended December 31, 2012, are presented below.

- Refer to the information provided for Aspen Corporation. If Aspen estimates its bad debts at 4% of net credit sales, what amount will be reported as bad debt expense for 2012?

• A) $50,000
• B) $75,000
• C) $78,000
• D) $84,000

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Definitions:

Cognitive Bias

Holding onto one’s preferences and beliefs regardless of contrary information, which results in decisions that are not economically accurate or rational.

Common Measures Bias

When managers focus on common performance metrics across divisions and ignore performance metrics that are unique to individual divisions.

Divisional Performance

An assessment of the financial and operational effectiveness of a distinct business unit within a larger company.

Value Chain

A model that describes the full range of activities needed to create a product or service, from initial conception through the different phases of production to the delivery to consumers.