Refer to the Information Provided in Table 8

question 174

Multiple Choice

Refer to the information provided in Table 8.10 below to answer the questions that follow.
Table 8.10
-Refer to Table 8.10. At an aggregate output level of $2,000 million, the unplanned inventory change is

• A) -$800 million.
• B) -$200 million.
• C) $700 million.
• D) $800 million.

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Definitions:

Dollar Amount

The value of a transaction or an item expressed in units of currency.

Allowance Method

An accounting technique that estimates and prepares for the amount of bad debts customers might not pay.

Direct Write-Off Method

The method of accounting for uncollectible accounts that recognizes the expense only when accounts are judged to be worthless.

Uncollectible Accounts

Funds that a company is unable to collect from its debtors, leading to recognition as a loss.