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

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Definitions:

Wealth

The total value of all financial assets and physical possessions owned by an individual, household, or nation, minus any debts.

Level Of Satisfaction

A measure of how goods, services, or conditions meet an individual's needs, desires, or expectations.

Risk Averse

A description of an individual or entity that prefers to avoid risk or chooses lower risk options when faced with uncertainty, often prioritizing security over potential higher returns.

Utility Function

A mathematical representation describing how consumers rank different bundles of goods based on the level of satisfaction they provide.