The Allowance for Bad Debts Account Is A(n)

question 3

Multiple Choice

The Allowance for Bad Debts account is a(n) :

• A)current asset.
• B)contra current asset.
• C)expense.
• D)contra revenue.

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Definitions:

Machine-Hours

A unit of measure that represents the operational time of a machine, used in allocating manufacturing overhead based on the time machines are run.

Plantwide Predetermined

A rate, often related to overhead costs, that is set before the accounting period begins and applied uniformly throughout an entire plant or organization.

Machine-Hours

A measure of production output or activity level using the total hours machines are operated.

Plantwide Predetermined

A uniform overhead rate used across an entire plant or factory, calculated by dividing estimated overhead costs by an estimated allocation base like labor hours or machine hours.