Manley Operates a Law Practice on the Accrual Method and Calendar

question 30

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 $14,600. At the end of the year, Manley recorded bad debt expense of $21,900 and the balance of doubtful accounts had increased to $19,100. What is Manley's deduction for bad debt expense this year?

• A)$21,900
• B)$4,500
• C)$26,400
• D)$2,800
• E)$17,400

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Definitions:

Libel Per Se

Defamatory statements that are blatantly damaging to an individual's reputation without the need for further explanation or proof of harm.

Editorial

An article or short piece in a publication expressing the opinion of its editor or publisher.

Punitive Damages

Monetary compensation awarded to a plaintiff that goes beyond what is necessary to compensate for losses, intended to punish the defendant for particularly egregious behavior.

Deter

To discourage or prevent from acting, typically through the threat of negative consequences.