Abbot Safe & Lock the Following Information Was Obtained from the Company's

question 123

Multiple Choice

Abbot Safe & Lock The following information was obtained from the company's records for 2012:
$\begin{array}{l} \text {Credit sales dwing the year } &\$ 3,200,000 \\ \text { Accounts receivable-December 31, 2012 } &325,000 \\ \text {Allowance for doubtful ac counts-December 31, 2012 } &35,000 \\ \text {Bad debt expense for the year } &20,000\end{array}$
-Refer to Abbot Safe & Lock.What is the effect on liquidity when the company records its estimate for bad debt expense using the allowance method?

• A)Liquidity decreases
• B)Liquidity increases
• C)Liquidity stays the same
• D)Liquidity both increases and decreases

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Definitions:

Circular Reaction

A repetitive action that achieves a desired outcome, often observed in infants as a part of their cognitive development process.

Secondary Circular Reaction

A developmental phase in infants, part of Piaget's theory, where they repeat actions affecting their environment, leading to the discovery of new experiences.

Mental Representation

The mind's ability to hold internal images or concepts of external objects, events, and relationships.

Cognitive Development

The process by which individuals learn and develop mental processes throughout their lives, including thinking, remembering, and problem-solving skills.