The Golden Rule Is to Be Applied When

question 19

Multiple Choice

The Golden Rule is to be applied when:

• A)Reading the legal text we are able to give words and phrases their ordinary and natural meanings.
• B)Interpreting the legal text literally would lead to a result that is absurd or inconsistent with the rest of the document.
• C)Interpreting the legal text literally would be inconsistent with the purpose or object underlying the text.
• D)Necessary to ascertain the mischief behind the text.

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Definitions:

Uncollectible Account

A receivable that a company has deemed to be uncollectable from the debtor, often written off as bad debt or expense.

Accounts Receivable

Funds that are owed to a company by customers for goods or services delivered or used but not yet paid for, typically within a short-term period.

Allowance for Doubtful Accounts

A contra-asset account that represents the estimated portion of accounts receivable that may not be collectible.

Bad Debts Expense

The amount of receivables that a company does not expect to collect and thus writes off as a loss in its accounting records.