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

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Definitions:

Intermittent Processes

Production processes characterized by non-continuous and irregular production operations, often used for producing a wide variety of products in small volumes.

Repetitive Focus

This refers to the concentration on repeating tasks or procedures to improve efficiency or skill.

Flash Frozen

A process of freezing foods or substances rapidly to preserve freshness and minimize ice crystal formation.

Fixed Costs

Business expenses that remain unchanged regardless of the level of production or sales, such as rent, salaries, and insurance premiums.