A Psychologist Tells Children a Story in Which a Puppet

question 238

Multiple Choice

A psychologist tells children a story in which a puppet named Maxi puts a ball in one cupboard and then leaves the room.While she is gone,another puppet moves the ball to another cupboard.Then Maxi comes back.At this point,the psychologist asks the children in which cupboard will Maxi look for the ball.Most 3-year-olds probably will say the _____ cupboard,and most 5-year-olds will say the _____ cupboard.

• A)first;first
• B)first;second
• C)second;first
• D)second;second

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Definitions:

Allowance Method

An accounting technique to estimate and record bad debts by recognizing a provision for accounts receivable that might not be collected.

Bad Debt Expense

An expense recorded by businesses to reflect irrecoverable amounts owed by customers, considered an unavoidable cost of extending credit.

Uncollectibles

Debts owed to a company that are considered unlikely to be paid and are often written off as bad debt.

Direct Write-off Method

A method of accounting for bad debts that directly writes off unpaid invoices when they are deemed uncollectible.