Your Company Uses the Aging of Accounts Receivable Method

question 53

Multiple Choice

Your company uses the aging of accounts receivable method.Net credit sales are unchanged from last year,the year-end balance in Accounts Receivable is unchanged from the previous year's ending balance,and there were no write-offs during the current year.The company previously averaged about 20% of its total accounts receivable in the "over 90 days past due" category and now has 35% in this category at the end of the current year.The dollar amount of the adjustment to record Bad Debt Expense in the current year:

• A) decline, thus increasing the ending balance of the Allowance for Doubtful Accounts account.
• B) increase, thus increasing the ending balance of the Allowance for Doubtful Accounts account.
• C) decline, thus reducing the ending balance of the Allowance for Doubtful Accounts account.
• D) increase, thus reducing the ending balance of the Allowance for Doubtful Accounts account.

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Definitions:

Role Model

An individual whose behavior, example, or success is or can be emulated by others, especially younger people.

Visual Preference

The tendency to preferentially pay attention to certain visual stimuli over others, often studied in the context of infant and child development.

Stimulus

Any external or internal event or factor that can provoke a response from an organism or a system.

High-Amplitude Sucking

A method used in developmental research where infants control the presentation of stimuli by varying their sucking strength.