Manley Operates a Law Practice on the Accrual Method and Calendar

question 95

Multiple Choice

Manley operates a law practice on the accrual method and calendar year. At the beginning of the year, Manley's firm had an allowance for doubtful accounts with a balance of $15,000. At the end of the year, Manley recorded bad debt expense of $23,000 and the balance of doubtful accounts had increased to $18,000. What is Manley's deduction for bad debt expense this year?

• A)$23,000
• B)$3,000
• C)$26,000
• D)$5,000
• E)$20,000

---

Definitions:

Joint Venturer

An individual or entity that collaborates with another party in a joint venture, sharing in the risks and rewards of the business endeavor.

Breach of Loyalty

A failure to remain faithful to commitments or obligations, particularly in a fiduciary or trust-based context.

Damages

Compensation claimed by or awarded to a person for injury or loss caused by the wrongful act of another.

Dissolved

The process of formally ending or terminating a legal entity or agreement.