James Is in the Business of Debt Collection

question 79

True/False

James is in the business of debt collection.He purchased a $20,000 account receivable from Green Corporation for $15,000.During the year, he collected $17,000 in final settlement of the account.James can take a $2,000 bad debt deduction in the current year.

---

Definitions:

Special Causes

Unusual, non-random factors that cause variability in a process, distinct from common causes.

Common Causes

Natural variations in a process, which are constant and inherent in the system over time, as opposed to special causes that are unusual or not part of the process.

Special Causes

Unusual events or circumstances that can cause variations in a process or system, distinguishing them from common, everyday variations.

Common Causes

Underlying factors or conditions that consistently contribute to a problem, issue, or variability in a process.