Bert Had Accounts Receivable of $280,000 and an Allowance for Impairment

question 40

Multiple Choice

Bert had accounts receivable of $280,000 and an allowance for impairment of $10,800 just before writing off as worthless an account receivable from Ernie Company of $1,600. After writing off this receivable what would be the balance in Bert's Allowance for Impairment?

• A) $10,800 credit balance.
• B) $12,400 credit balance.
• C) $9,200 credit balance.
• D) $9,200 debit balance.

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Definitions:

Police Powers

The inherent authority of a government to regulate behavior and enforce order within its territory, often for the protection of health, safety, welfare, and morals of its citizens.

Ninth Amendment

A part of the U.S. Constitution suggesting that the listing of specific rights in the Constitution does not mean that other rights not listed are denied to the people.

Dormant Commerce Clause

The Dormant Commerce Clause refers to the principle that state laws cannot unduly burden interstate commerce, derived from the Commerce Clause of the U.S. Constitution.

Privileges and Immunities Clause

A provision in the U.S. Constitution ensuring that citizens of each state are entitled to the privileges and immunities of citizens in the several states.