A Retailer Increases Bad Debts Expense from 2

question 28

Multiple Choice

A retailer increases bad debts expense from 2.5% to 3% of credit sales. Given this information, which of the following statements is correct?

• A)The net income of prior years is overstated and a retrospective correction should be made.
• B)This is a change in estimate and should be treated prospectively.
• C)This is a change in accounting policy and treatment is retrospective.
• D)This is a correction of an error and a retrospective correction should be made.

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Definitions:

MHC Class II

Major Histocompatibility Complex Class II, a class of molecules found on the surface of immune cells that present antigens to helper T cells, playing a crucial role in the immune response.

MHC Class I

A group of proteins found on the cell surface that present peptide fragments to the immune system, critical for the immune response to infected or dysfunctional cells.

Neutrophils

A type of white blood cell, part of the innate immune system, which defends the body against bacteria and fungi through phagocytosis.

Interferons

Proteins that prevent viral replication.