Which of the Following Is Not Acceptable in Estimating Uncollectible

question 80

Multiple Choice

Which of the following is not acceptable in estimating uncollectible accounts receivable under GAAP?

• A) The estimate of uncollectible accounts is based on a percentage of sales for the period.
• B) The estimate of uncollectible accounts is based on a percentage of the accounts receivable balance at the end of a period.
• C) The estimate of uncollectible accounts is based on an aging schedule.
• D) No estimate of uncollectible accounts is made; accounts are written off when it is determined they cannot be collected.

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Definitions:

Kant

Immanuel Kant, an 18th-century German philosopher renowned for his work in ethics, epistemology, and metaphysics, emphasizing duty, moral law, and the categorical imperative.

Mutual Benefit

An arrangement or action by which all parties involved gain or benefit, commonly used in contexts of legal agreements, business dealings, or cooperative efforts.

Free Market Ethics

Ethical principles that support or relate to the functioning of unregulated markets and the voluntary exchange between parties.

Milton Friedman

An influential American economist known for his advocacy of free markets, limited government, and a pioneering contributor to the fields of economics and statistics.