Under the Allowance Method, the Recovery of an Account Previously

question 103

Multiple Choice

Under the allowance method, the recovery of an account previously written-off ________.

• A) has no effect on the allowance for uncollectible accounts
• B) has no effect on total assets
• C) increases net income
• D) increases net realizable value of receivables

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Definitions:

Assumes The Risk

A legal principle stating that a person voluntarily exposes themselves to known hazards, accepting any incurred harm or loss.

Future

In a general context, 'future' refers to the time or a period of time following the moment of speaking or writing; in finance, it often pertains to a contract to buy or sell an asset at a later date.

Exaggeration

A statement that represents something as better or worse than it really is, often used for emphasis or effect.

Fraud

The intentional deception or misrepresentation made by a person with the aim of gaining something of value or causing some benefit to themselves at another’s expense.