The Analysis of Receivables Method of Costing Inventory Is Based

question 4

Multiple Choice

The analysis of receivables method of costing inventory is based on the assumption that:

• A) the uncollectible accounts can be estimated as a percentage of credit sales.
• B) the bad debt expense is recorded by estimating uncollectible accounts at the end of the accounting period.
• C) the bad debt expense is recorded only when an account is determined to be worthless.
• D) the longer an account receivable is outstanding, the less likely that it will be collected.

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Definitions:

Law of Effect

A psychological principle stating that behaviors followed by satisfying consequences tend to be repeated, while those followed by unpleasant consequences are less likely to be repeated.

Conditioned Stimulus

A previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response in classical conditioning.

Unconditioned Stimulus

In classical conditioning, a stimulus that unconditionally, naturally, and automatically triggers a response without prior conditioning.

Emotional Responses

The reactions or feelings that are generated in response to stimuli, events, or thoughts, influenced by an individual's psychological state or temperament.