Economists Face an Obstacle That Many Other Scientists Do Not

question 242

Multiple Choice

Economists face an obstacle that many other scientists do not face.What is that obstacle?

• A) It is often difficult to formulate theories in economics.
• B) It is often difficult and sometimes impossible to perform experiments in economics.
• C) Economics cannot be addressed objectively; it must be addressed subjectively.
• D) The scientific method cannot be applied to the study of economics.

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that estimates the portion of accounts receivable which may not be collected, reducing the reported amount of receivables.

Bad Debt Expense

The cost a company incurs because of the inability to collect payments from customers for credit sales, recognized as an expense.

Uncollectible Accounts

Accounts from which businesses are unable to obtain payment, often leading to writing off these amounts as a bad debt expense.

Allowance Method

A method used in accounting to estimate the amount of uncollectible accounts receivable. This ensures revenues and expenses are matched in the period they are incurred.