Maybridge,Inc

question 274

Multiple Choice

Maybridge,Inc.has 3000 shares of common stock outstanding.A stockholder has 300 shares.If the company distributes a 25% stock dividend,the stockholder now holds ________ shares of Maybridge stock.

• A) 375
• B) 750
• C) 300
• D) 75

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Definitions:

Bad Debts Expense

An expense reported on the income statement, representing accounts receivable that a company does not expect to collect.

Income Statement Approach

A method for creating an adjusting entry for bad debts by estimating uncollectible accounts based on income statement figures.

Aging

The process of categorizing accounts receivable based on how long an invoice has been outstanding to determine credit risk.

Direct Write-Off Method

An accounting method used to recognize bad debts at the point when specific accounts are deemed uncollectible, directly impacting the income statement.