During 2015, Oldham Corporation, Which Uses the Allowance Method of Accounting

question 96

Multiple Choice

During 2015, Oldham Corporation, which uses the allowance method of accounting for doubtful accounts, recorded a provision for bad debt expense of $35,000 and in addition it wrote off, as uncollectible, accounts receivable of $10,000. As a result of these transactions, net cash flows from operating activities would be calculated (indirect method) by adjusting net income with a

• A) $35,000 increase.
• B) $10,000 increase.
• C) $25,000 increase.
• D) $25,000 decrease.

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Definitions:

Corporate Social Marketing

Support for a behavior changing campaign to improve safety, health, or the environment.

Customer Donations

A process where businesses encourage or facilitate their customers to donate to charitable causes or organizations.

Ronald McDonald House Charities

A non-profit organization that provides support and resources for families with sick children, including housing near medical facilities.

Drop-Shipping

A retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer.