Accounts Receivable Has a Balance of $16,000 and the Allowance

question 52

Multiple Choice

Accounts receivable has a balance of $16,000 and the Allowance for uncollectible accounts has a credit balance of $1,700.What is Net accounts receivable before and after a $60 account receivable is written off?

• A) $14,300 before and $14,240 after
• B) $14,300 before and $14,300 after
• C) $16,000 before and $15,940 after
• D) $16,000 before and $16,000 after

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Definitions:

Disposable Income

The amount of income left for spending or saving after taxes and other deductions have been subtracted.

Saving

The act of setting aside a portion of one’s income for future use, instead of spending it immediately.

Disposable Income

After subtracting income taxes, disposable income is the money remaining for individuals or households to spend or save.

MPC

The marginal propensity to consume, indicating the proportion of an additional unit of income that is spent on consumption.