The Following Information Is from the Records of Mountainview Camera

question 135

Multiple Choice

The following information is from the records of Mountainview Camera Shop: $$\begin{array} { | l | l | } \hline \text { Accounts receivable, December 31, 2018 } & \$ 81,000 \text { (debit) } \\\hline \text { Net credit sales for 2018 } & 161,000 \\\hline \text { Accounts written off as uncollectible during 2018 } & 15,000 \\\hline \text { Cash sales during 2018 } & 45,000 \\\hline\end{array}$$ The company uses the direct write-off method for bad debts.What is the amount of bad debts expense?

• A) $81,000
• B) $45,000
• C) $65,000
• D) $15,000

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Definitions:

Statement of Earnings

A financial document that provides an account of a company's revenue, expenses, and profit over a specific period, also known as an income statement.

FVTPL

Fair Value Through Profit or Loss, a classification under IFRS for financial instruments measured at their fair value with changes recognized in the profit or loss.

Significant Influence

The power to participate in the financial and operating policy decisions of another entity without controlling it.

Investment Account

An account held at a financial institution that contains securities, cash, and other assets that an individual or entity invests in.