Gowns, Inc

question 259

Multiple Choice

Gowns, Inc. uses the percentage of receivables basis to estimate its bad debts. At December 31, 2014, Gowns estimates total bad debts that will become uncollectible in the future as €4,956. The existing balance in the Allowance for Doubtful Accounts is a credit balance of €1,056. The Accounts Receivable balance at December 31, 2014 is €79,200. The amount of the bad debt adjusting entry at December 31, 2014 will impact the statement of financial position accounts by

• A) Increase expenses by €4,956.
• B) Increasing the Allowance for Doubtful Accounts by €4,956.
• C) Increasing Accounts Receivable by €3,900.
• D) Increasing the Allowance for Doubtful Accounts by €3,900.

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Definitions:

Role Distancing

A behavior or strategy whereby an individual separates themselves from the role they are expected to play, indicating a divergence between behavior and true belief or identity.

Dramaturgy

A sociological perspective that likens social interaction to the theater, where individuals perform roles before others.

Dramaturgy

A sociological perspective that views social interactions as theatrical performances, where individuals play roles and manage impressions before others.

Symbolic Interaction

A sociological perspective focusing on the ways in which individuals interpret and give meaning to symbols, objects, and interactions within their social world.