Perlita Works in a Highly Competitive Financial Services Firm

question 24

Multiple Choice

Perlita works in a highly competitive financial services firm. Salespeople who meet their goals are given large bonuses, but those who don't are often fired. The actions of the sales force are often unsupervised as well. In this situation, what factors related to ethical decision making will most likely influence the actions of salespeople in the firm?

• A) opportunity factors
• B) social factors
• C) transparency factors
• D) individual factors

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Definitions:

Accounts Receivable

Reflects the funds that a business is entitled to receive from purchasers for transactions on credit.

Bad Debt Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect due to customers' inability to pay.

Uncollectible

Refers to accounts receivable that a business deems unlikely to be collected and writes off as a loss.

Direct Write-off

A method for accounting for bad debts whereby debts deemed uncollectable are written off directly against income at the time they are determined to be uncollectable.