The Collection of an Account That Had Been Previously Written

question 17

Multiple Choice

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

• A) will increase income in the period it is collected.
• B) will decrease income in the period it is collected.
• C) requires a correcting entry for the period in which the account was written off.
• D) does not affect income in the period it is collected.

---

Definitions:

Drought Conditions

An extended period of deficient rainfall relative to the statistical multi-year average for a region, resulting in water scarcity that can affect agriculture, water supply, and ecosystems.

Average Inventory

The mean stock level held by a company over a certain period, calculated to understand inventory trends and management effectiveness.

Optimal Order Quantity

Optimal Order Quantity is the ideal amount of inventory a business should purchase to minimize costs while meeting demand without overstocking or understocking.

Economic Order Quantity

A formula used to determine the optimal order quantity that minimizes the total inventory holding costs and ordering costs.