OPEC, the Organization of Petroleum Exporting Countries, Was Formed in Baghdad

question 44

Essay

OPEC, the Organization of Petroleum Exporting Countries, was formed in Baghdad in 1960. Since its formation, this cartel has suffered from a major problem with respect to the quota (limit) of output it assigns each member nation. What is OPEC's goal and what sort of quota do you think the cartel assigns? How and why do nations cheat on their quota? What happens when a nation cheats on its quota?

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Definitions:

Bad Debt Expense

An accounting term representing the amount of revenue considered uncollectible from credit sales.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables balance to reflect the amount that is expected to be uncollectible.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is an accounting technique to estimate the amount of receivables that are expected not to be collected, acting as a contra account to accounts receivable.

Bad Debt Expense

An expense reported on the income statement, representing the estimated amount of credit sales that are not expected to be collected due to customer default.