During the Year, Popsicle Inc

question 76

Multiple Choice

During the year, Popsicle Inc., which uses the allowance method, made an entry to write off a $4,000 uncollectible account. Before this entry was posted, the balance in accounts receivable was $80,000 and the balance in the allowance account was $7,000. The net realizable value of accounts receivable after the write off entry was

• A) $80,000.
• B) $77,000.
• C) $76,000.
• D) $73,000.

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Definitions:

Consumer's Optimal

The point at which the combination of goods and services purchased by a consumer provides maximum satisfaction or utility, given the consumer's income and the prices of goods.

Price of Good

The amount of money required to purchase a specific good or service.

Substitution Effect

The economic principle that as prices rise or incomes decrease, consumers replace more expensive items with less costly alternatives.

Price Decrease

A reduction in the cost of goods or services, typically resulting from factors such as increased supply, decreased demand, or external market conditions.