Comparative Statics

question 76

Multiple Choice

Comparative statics:

• A)examines how exogenous variables change as endogenous factors change.
• B)examines how endogenous variables change as exogenous factors change.
• C)presents a comparison of two separate markets at a single point in time.
• D)is often rendered useless because exogenous variables can never be expected to remain constant for long.

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Definitions:

Allowance for Doubtful Accounts

A contra asset account that represents the estimated portion of accounts receivable that may not be collectible.

Allowance Method

An accounting technique used to estimate and account for doubtful accounts receivable and adjust the amount of accounts receivable reported on the balance sheet.

Accounts Receivable

Money owed to a company by its customers for sales or services on credit, considered a current asset on the balance sheet.

Allowance for Doubtful Accounts

A contra-asset account used to estimate and offset the amount of receivables that may not be collected.