The Percent-Of-Sales Method for Computing Uncollectible Accounts

question 21

Multiple Choice

The percent-of-sales method for computing uncollectible accounts:

• A)computes Uncollectible-Account Expense as a percent of accounts receivable.
• B)takes a balance sheet approach.
• C)employs the expense recognition (matching)concept.
• D)will result in the same amount of estimated Uncollectible-Accounts Expense as the aging-of-receivables method.

Recognize the characteristics and implications of increasing-cost, decreasing-cost, and constant-cost industries on the industry's supply curve and market prices.

Interpret the impact of external and internal economies and diseconomies of scale on long-run average costs.

Describe the adjustment processes in perfectly competitive markets towards long-run equilibrium under different cost conditions.

Analyze the effects of demand changes on industry growth, prices, and firm entry or exit in the long run.

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Definitions:

Number of Sellers

A factor in market structures that refers to the total count of suppliers offering a similar product or service.

Technological Improvement

Advances in technology that enhance productivity, efficiency, or quality in the production of goods or services.

Cost of an Input

The cost of an input refers to the amount of money expended on resources needed to produce a good or service.

Number of Buyers

A factor that affects market demand, representing how many consumers are interested in purchasing a particular good or service.