When a Company Makes an Adjustment in Anticipation of Future

question 4

Multiple Choice

When a company makes an adjustment in anticipation of future uncollectible debt:

• A)it debits an asset account and credits a liability account.
• B)it debits a revenue account and credits an asset account.
• C)it debits a revenue account and credits an expense account.
• D)it debits an expense account and credits a contra-asset account.

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Definitions:

Yankee Bond

A bond issued by a foreign entity in the United States, denominated in U.S. dollars, allowing issuers to access capital from U.S. investors.

Samurai Bond

A Japanese yen-denominated bond issued in Japan by a non-Japanese entity, aiming to attract investors based in Japan.

Bulldog Bond

A bond issued in the United Kingdom by foreign entities, denominated in British pounds, as part of international finance.

Subordinated Debentures

A type of debt instrument that ranks below other debts in case of liquidation or bankruptcy.