Osco Ltd Uses the Allowance Method of Accounting for Bad

question 12

Multiple Choice

Osco Ltd uses the allowance method of accounting for bad and doubtful debts. Bad and doubtful debts expense shown in the income statement is $10 000 and the amount of bad debts actually written off is $8 000. If sales are $220 000 and accounts receivable have increased by $12 000 over the period, the amount to be shown in the statement of cash flows for receipts from customers is:

• A) $200 000
• B) $210 000
• C) $220 000
• D) $240 000

---

Definitions:

Old Eyes

A colloquial term referring to age-related changes in vision, typically presbyopia or decreased visual acuity.

Myopia

A vision condition characterized by difficulty seeing distant objects clearly, commonly referred to as nearsightedness.

Presbyopia

A common age-related condition where the eye's lens loses the ability to focus clearly on close objects, typically starting in middle age.

Hyperopia

A vision condition also known as farsightedness, where distant objects can be seen more clearly than near objects due to the light entering the eye focusing behind the retina.