At the Beginning of 2017,Elixir,Inc

question 147

Multiple Choice

At the beginning of 2017,Elixir,Inc.has the following account balances:

Bad Debts Expense $0
During the year,credit sales amounted to $800,000.Cash collected on credit sales amounted to $770,000,and $18,000 has been written off.At the end of the year,the company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 2.5%.The ending balance in the Allowance for Bad Debts is ________.

• A)$7,000
• B)$2,000
• C)$8,250
• D)$9,000

---

Definitions:

Demand Equals Supply

An equilibrium condition in markets where the quantity of a good demanded by consumers is equal to the quantity of the good supplied by producers.

Numeraire

is a standard unit of measurement in economic models used to express prices and exchange rates.

Edgeworth Box

A diagram used in economics to show the distribution of resources and the allocation of goods in a two-person, two-good economy.

Contract Curve

In economics, the curve that represents the set of Pareto efficient allocations in an Edgeworth Box diagram.