The Following Information Is Related to December 31, 2013 Balances

question 86

Multiple Choice

The following information is related to December 31, 2013 balances. $\begin{array}{lc}\text {- Accounts receivable } & \$ 700,000 \\\text {- Allowance for doubtful accounts (credit) } & (60,000) \\\text {- Cash realizable value } & 640,000\end{array}$ During 2014 sales on account were $195,000 and collections on account were $115,000. Also, during 2014 the company wrote off $11,000 in uncollectible accounts. An analysis of outstanding receivable accounts at year end indicated that bad debts should be estimated at $72,000. Bad debt expense for 2014 is:

• A) $23,000.
• B) $12,000.
• C) $72,000.
• D) $ 1,000.

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Definitions:

Correlation Coefficient

A statistical measure that describes the extent to which two variables change together and thus how well one variable predicts the other.

Risk

The potential for losing something of value or the possibility of an unwanted outcome.

Insanity Defense

A legal defense in which a person charged with a criminal offense claims to be not guilty by reason of insanity at the time of the crime.

Criminal Commitment

A legal process by which people accused of a crime are instead judged mentally unstable and sent to a mental health facility for treatment.