You Buy a Pair of Very Used Skis for $25

question 13

Multiple Choice

You buy a pair of very used skis for $25 from a store in Steamboat Springs.You learn later that Billy Kidd,a famous skier,owned the skis years ago.The store demands that you return them because it did not know that they once belonged to Billy Kidd.Which is true?

• A) The store can force you to return them based on mutual mistake.
• B) The store can force you to return them based on unilateral mistake.
• C) You can be forced to return the skis because you have defrauded the store owner.
• D) The store will not be able to force you to return the skis.

---

Definitions:

Direct Write Off Method

A method of accounting for bad debts that involves charging unpaid invoices directly to expense when they are determined to be uncollectible.

Bad Debts Expense

An expense account to record accounts receivable that a company does not expect to collect.

Allowance for Doubtful Accounts

A contra-asset account designed to predict the value of receivables that are expected to be uncollectible.