Fixed Financial Charges Include

question 21

Multiple Choice

Fixed financial charges include

• A) stock repurchase expense.
• B) bond interest expense and preferred stock dividends.
• C) common stock dividends and bond interest expense.
• D) common stock dividends and preferred stock dividends.

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Definitions:

Allowance for Doubtful Accounts

A reserve against the portion of accounts receivable that may not be collectible, reducing the book value to the amount expected to be collected.

Gross Amount

The total or whole amount of something before any deductions, such as taxes or discounts, are made.

Allowance Method

An accounting technique that estimates and sets aside a portion of accounts receivable deemed not collectible.