Which of the Following Statements Regarding Methods of Accounting for Bad

question 70

Multiple Choice

Which of the following statements regarding methods of accounting for bad debts is true?

• A) When the allowance method is used, the journal entry to write-off an uncollectible account does not change the amount reported as net accounts receivable on the balance sheet.
• B) The two methods of accounting for bad debts that are acceptable under GAAP are the allowance method and the direct write-off method.
• C) When the allowance method is used, if actual results differ from the estimates, the prior year financial statements must be corrected.
• D) When the allowance method is used, bad debt expense is equal to the write-offs that occurred during the

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Definitions:

Variable on the Horizontal Axis

In data representation, a quantity that is measured along the horizontal axis, usually independent in nature.

Slope

The measure of the steepness or angle of a line, indicating the rate at which it rises or falls.

Average Costs

This refers to the per-unit production cost, calculated by dividing total costs by the total quantity produced, indicating the efficiency of production.

Output

The total amount of goods or services produced by a firm or economy.