Exhibit 5-4

question 2

Multiple Choice

Exhibit 5-4.Consider the following probability distribution. Refer to Exhibit 5-4.The variance is _____.

• A)1.14
• B)1.29
• C)1.65
• D)1.94

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Definitions:

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collectible.

Allowance Method

An accounting technique used to estimate and account for potential uncollectible accounts receivable and bad debts.

Net Realizable Value

The projected selling price of items subtracted by their sales or disposal expenses.

Accounts Receivable

Outstanding payments from customers to a company for goods or services already delivered but not yet compensated for.