Which of the Following Statements Does Not Correctly Describe the Allowance

question 17

Multiple Choice

Which of the following statements does not correctly describe the allowance for doubtful accounts balance?

• A)It is reported on the balance sheet as a component of current assets.
• B)It is a contra-asset account.
• C)It is reported on the balance sheet as a stockholders' equity account.
• D)It is created as a result of the adjusting entry to record bad debt expense.

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Definitions:

Glocalization

A process combining globalization with local considerations, adapting global practices to fit local needs, cultures, and practices.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to an increase in interconnectedness and interdependence among the world's markets and businesses.

Local Differences

Variations in cultural, social, economic, and environmental characteristics that are unique to specific geographic areas or communities.

McDonaldization

The process by which principles of the fast-food industry, such as efficiency, calculability, predictability, and control, are becoming dominant in other sectors of society.