What Is the Expense That Holyoak Should Report for Its

question 84

Multiple Choice

What is the expense that Holyoak should report for its promotional rebates in its 2009 income statement?

• A)$142,000
• B)$152,000
• C)$170,000
• D)$200,000 This is the expected amount to be claimed from 2009 sales; i.e., $20 10,000 .85.

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Definitions:

Allowance Method

An accounting technique used to estimate and account for bad debts (uncollectible receivables) based on historical data or economic conditions.

Allowance for Doubtful Accounts

A contra asset account used to estimate the portion of a company's receivables that may ultimately not be collected.

Allowance for Doubtful Accounts

An accounting provision representing an estimate of accounts receivable that may not be collected.

Bad Debt Expense

An accounting expense representing accounts receivable that a company does not expect to collect.