When There Is a Price Floor There Will Be

question 184

Multiple Choice

When there is a price floor there will be

• A)a shortage.
• B)a surplus.
• C)either a shortage or a surplus.
• D)neither a shortage nor a surplus.

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Definitions:

Allowance Method

An accounting technique used to account for bad debts by estimating uncollectible accounts at the end of each period.

Accounts Receivable

Funds due to a company for goods or services delivered or used but not yet paid for by customers.

Bad Debt Expense

An expense account that represents accounts receivables that a company does not expect to collect due to customers' inability to fulfill payment obligations.

Uncollectible Accounts Expense

Expenses related to uncollectible amounts from credit sales.