The Aging of Accounts Receivable Examines Each Account Receivable to Estimate

question 61

True/False

The aging of accounts receivable examines each account receivable to estimate the amount that is uncollectible.

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Definitions:

Contra-asset

A contra-asset account is a type of asset account where its balance is a negative figure that offsets the balance of its corresponding asset account.

Liability

A financial obligation or debt owed by a company to another entity, which is expected to be settled through the transfer of assets or services.

Inventory

Consists of all the goods a company has in stock that are ready to be sold, including raw materials, work-in-progress, and finished goods.

Expense

A cost or charge that a company incurs through its operations aimed at generating revenue.