Which of the Following Measures of Forecast Accuracy Is Susceptible

question 33

Multiple Choice

Which of the following measures of forecast accuracy is susceptible to the problem of positive and negative forecast errors offsetting one another?

• A)Mean absolute error
• B)Mean forecast error
• C)Mean squared error
• D)Mean absolute percentage error

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Definitions:

Bad Debts Expense

Bad Debts Expense represents the estimated amount of receivables that a company does not expect to collect.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables reported on the balance sheet by the amount expected not to be collected.

Past Due Time

Past Due Time refers to the period that has elapsed after the official due date of a payment or obligation, signaling a delay in payment.

Collectibility

The likelihood or ability of an entity to collect on its accounts receivable or outstanding debts.