Bad Debts Expense Is Considered

question 77

Multiple Choice

Bad Debts Expense is considered

• A)an avoidable cost in doing business on a credit basis.
• B)an internal control weakness.
• C)a necessary risk of doing business on a credit basis.
• D)avoidable unless there is a recession.

---

Definitions:

Law of Demand

An economic principle stating that as the price of a good or service decreases, the quantity demanded increases, and vice versa, holding other factors constant.

Effective Price Floor

A government-imposed limit below which prices cannot legally fall, set above the equilibrium price, leading to potential surplus or excess supply.

Industry Firms

Companies or businesses that operate within a specific sector of the economy, producing goods or services related to that sector.

Ceiling Price

A maximum legal price set by the government on certain goods or services to prevent prices from rising above a certain level.