Alberta's Appliances Is a Wholesaler That Sells to Retail Stores

question 14

Multiple Choice

Alberta's Appliances is a wholesaler that sells to retail stores on credit.To provide for possible bad debts,Alberta established a $32,000 allowance for uncollectible accounts.One of its customers goes bankrupt and Alberta decided to write off the account as uncollectible.What journal entry should Alberta make to record the bankruptcy?

• A)debit bad debts expense;and credit accounts receivable
• B)debit bad debts expense;and credit allowance for uncollectible accounts
• C)debit sales revenues;and allowance for uncollectible accounts
• D)debit allowance for uncollectible accounts;and credit accounts receivable

Understand the accounting for and effects of restrictions/appropriations of retained earnings.

Distinguish between public and private corporations based on stock characteristics.

Grasp the effects of correcting errors on retained earnings and how to calculate year-end balances.

Know the main sources of stockholders' equity and the primary purpose of stock splits.

---

Definitions:

Average Variable Costs

an economic measure representing variable costs (expenses that change with production levels) averaged over a quantity of output.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes as the production volume is increased.

Average Variable Cost Curve

A graph that displays how the variable cost per unit changes with changes in output level.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one more unit of a good varies as the production level increases.