The Ditmas Corp

question 60

Multiple Choice

The Ditmas Corp. uses the allowance method of recording bad debt expense. In 2017, it overestimated the amount of bad debt expense, and recorded an allowance that was too large. At the end of 2018, when it learns that more customers are paying than it expected, it will:

• A) Change the reported expenses for 2017, and re-issue its 2017 reports
• B) Report a lower 2018 bad debt expense than it would have if its 2017 estimate had been accurate
• C) Report a higher 2018 bad debt expense than it would have if its 2017 estimate had been accurate
• D) Ignore the incorrect estimate from 2017, and include only the bad debts related to 2018 sales in the 2018 income statement

---

Definitions:

Buyer Agents

Professionals or agencies that assist individuals or companies in purchasing products or services.

Personal Agents

Software agents designed to perform tasks or services for an individual. They act semi-autonomously on behalf of a user and may perform tasks like managing information or schedules.

Shopping Bot

An automated software that searches and scans the internet for the best deals and prices on products for online shoppers.

AI

Artificial Intelligence refers to the development of computer systems that can mimic human intelligence, including learning, reasoning, and self-correction.