Which of the Following Methods of Accounting for Uncollectible Accounts

question 52

Multiple Choice

Which of the following methods of accounting for uncollectible accounts does not properly match costs with revenues?

• A) Percentage of sales
• B) Percentage of receivables
• C) Direct write-off
• D) Aging schedule

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Definitions:

ABC System

Activity-Based Costing; a method of assigning overhead and indirect costs to specific products or projects, based on their usage of activities.

Single-Base Allocation

A cost allocation method where overhead costs are distributed based on a single criterion or cost driver.

Cost Difference

The variance between the actual cost and the standard or expected cost of an item or activity.

ABC System

Activity-Based Costing System, a method of assigning overhead and indirect costs to specific products and services based on their consumption of resources.