Where Are the Contingent Items Disclosed in the Financial Statements

question 1

Multiple Choice

Where are the contingent items disclosed in the financial statements?

• A)On the assets side of the balance sheet.
• B)On the liabilities side of the balance sheet.
• C)As footnotes to financial statements.
• D)In the income statement.
• E)In the director's report.

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Definitions:

Uncollectible Account

An uncollectible account is a receivable that a company is unable to collect, considered as bad debt or a write-off.

Net Amount

The remaining value after all deductions are made, such as for taxes or discounts.

Receivables

Funds that customers or clients owe to a business for products or services delivered on credit.

Estimated Bad Debts

The portion of accounts receivable that a company does not expect to collect.