The Statute of Limitations Provided by Article 2 Is Five

question 21

True/False

The statute of limitations provided by Article 2 is five years, which can be reduced or extended by the parties' contract.

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Definitions:

Allowance Method

The allowance method is a technique used to account for bad debts, where a business estimates the portion of receivables that may not be collectible and records it as an expense.

Journal Entry

A record of financial transactions in the accounting records, showing the accounts and amounts to be debited and credited.

Estimated

A calculated approximation or judgement made without complete information, often used in planning or forecasting.

Temporary Account

A temporary account is used to track transactions during an accounting period, which is then transferred to a permanent account at the period's end, such as revenue and expense accounts.