The Method of Accounting for Losses from Uncollectible Accounts That

question 61

Multiple Choice

The method of accounting for losses from uncollectible accounts that produces a proper valuation of the accounts receivable on the balance sheet is

• A) the allowance method based on aging the accounts receivable.
• B) the allowance method based on a percentage of net credit sales.
• C) the direct charge-off method.
• D) either the allowance method or the direct charge-off method.

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Definitions:

Individual

A single human being as distinct from a group, class, or family, often considered in the context of individuality and personal identity.

Psychoanalytic Theory

A psychological theory originating from Sigmund Freud, emphasizing unconscious processes such as conflicts, desires, and memories.

Extended Period

A length of time that is longer than usual or expected.

Case Study Approach

A research method involving an up-close, in-depth, and detailed examination of a subject of study (the case), as well as its related contextual conditions.