The fed purchases $400 worth of government bonds from the public. the reserve requirement is 12.5 percent, people hold no currency, and the banking system keeps no excess reserves. the u. s. money supply eventually increases by
a. $25.b. between $200 and $300.c. $1,600.d. $2,500.

Acompany has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. experience suggests that 6% of outstanding receivables are uncollectible. the current credit balance (before adjustments) in the allowance for doubtful accounts is $1,200. the journal entry to record the adjustment to the allowance account includes a debit to bad debts expense for $4,800. true or false