The Year-End Adjusting Entry to Record Bad Debt Expense Will

question 73

Multiple Choice

The year-end adjusting entry to record bad debt expense will increase which of the following ratios?

• A) Current.
• B) Quality of income.
• C)Quick.
• D)Profit margin.

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Definitions:

Amortized

The gradual reduction of a debt through regular payments that cover both interest and principal over time.

Finite Life

The limited time span during which an asset is expected to be useful in the operations of a business, after which it becomes obsolete or non-functional.

Amortized

This refers to the process of gradually paying off a debt through regular payments over a set period, factoring in both principal and interest.

Legal Life

The duration for which an asset is protected or regulated by legal rights, often referring to intellectual property or contractual agreements.