Monro Inc Uses the Accrual Method of Accounting

question 27

Multiple Choice

Monro Inc. uses the accrual method of accounting. Here is a reconciliation of Monro's allowance for bad debts for the current year.
Beginning allowance for bad debts $ 61,150
Actual write-offs of accounts receivable during the year (80,000 )
Addition to allowance 88,500
Ending allowance for bad debts $ 69,650
Because of the difference between the GAAP and the tax rules for accounting for bad debts, Monro Inc. has an:

• A) $8,500 permanent excess of book income over taxable income.
• B) $8,500 permanent excess of taxable income over book income.
• C) $8,500 temporary excess of taxable income over book income.
• D) $8,500 temporary excess of book income over taxable income.

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Definitions:

Short-Term Memory

The part of the memory system that is responsible for temporarily storing information for a brief period, typically seconds to minutes.

Decay

The process of losing information over time due to the non-use of a memory trace in the brain.

Interference

The act of impeding or obstructing something, often used in contexts such as memory interference, where one memory competes with or replaces another.

Chunking

A cognitive strategy for organizing information into more manageable parts or chunks to enhance memory and recall.