Sudan Ltd'S Allowance for Doubtful Accounts Was $85,000 at the End

question 268

Multiple Choice

Sudan Ltd.'s allowance for doubtful accounts was $85,000 at the end of 2013 and $105,000 at the end of 2012.For the year ended December 31, 2013, Sudan reported bad debt expense of $18,000 in its income statement.What amount did Sudan debit to allowance for doubtful accounts during 2013 to write off actual bad debts?

• A)$38,000
• B)$34,650
• C)$20,000
• D)$12,000

---

Definitions:

Projection Bias

The inclination to believe other people think, feel, and act the same way we do.

Satisficing

A decision-making strategy that aims for a satisfactory or adequate solution, rather than the optimal one.

Complete Rationality

The assumption in economic theories and models that decision-makers possess complete information, unlimited cognitive abilities, and can optimize their utility.

Anchoring And Adjustment

A cognitive bias where an individual relies too heavily on an initial piece of information (the "anchor") when making decisions, with subsequent adjustments made around this anchor.