The Goal of Business in Relation to Profit Is Generally

question 12

Multiple Choice

The goal of business in relation to profit is generally taken as:

• A) profit planning.
• B) profit maximisation.
• C) profit stabilisation.
• D) profit generation.

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Definitions:

Allowance Method

The allowance method is an accounting technique used to account for uncollectible receivables, allowing companies to estimate bad debts as an expense.

Direct Write-Off Method

An accounting procedure where uncollectible accounts receivable are directly written off against income at the time they are deemed noncollectible.

Noncurrent Asset

Assets intended for use over a long term, such as property, plant, and equipment, that are not expected to be converted into cash within a year.

Direct Write-Off Method

The direct write-off method is an accounting practice of charging unpaid debts directly to expense when they are deemed uncollectible, bypassing the allowance for doubtful accounts.