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Kelly's Christmas Store sells much of its products on credit to its customers, generating significant accounts receivable for Kelly. While most of her credit customers

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Kelly's Christmas Store sells much of its products on credit to its customers, generating significant accounts receivable for Kelly. While most of her credit customers end up paying what they owe, there is always a small percentage who do not. Each accounting period, Kelly charges a "bad debt expense" account on her balance sheet for her estimated losses from her inability to collect from those customers. The method Kelly uses to deal with her bad debt expenses is: an unfunded reserve a credit line a funded reserve current expensing

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