All of the Following Are Features of the Aging of Accounts

question 5

Multiple Choice

All of the following are features of the aging of accounts receivable method except

• A)focuses on asset valuation.
• B)analysis of allowance for doubtful accounts required in order to determine bad debts expense.
• C)emphasizes statement of financial position relationship.
• D)determines bad debt expense directly.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life in a systematic manner.

Cash Dividend

A payment made by a company out of its profits to shareholders, typically in cash, representing a portion of the earnings allocated to each share of stock.

Stock Dividend

A distribution of additional shares of a company to its shareholders, instead of cash, usually based on a fixed ratio to the existing shares held.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds.