Figure 6-32 -Refer to Figure 6-32.If the Government Set a Price Ceiling

question 20

Short Answer

Figure 6-32
-Refer to Figure 6-32.If the government set a price ceiling at $80,would there be a shortage or surplus,and how large would be the shortage/surplus?

---

Definitions:

Bad Debt Expense

The estimated amount of accounts receivable that is not expected to be collected.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collectible, reflecting potential losses due to credit sales.

Uncollectible Receivables

Debts owed to a company that are considered unlikely to be paid by the debtor.

Bad Debt Expense

An expense account reflecting the estimated amount of receivables that are expected not to be collected.