When the Allowance Method for Recognising Uncollectible Accounts Receivable Is

question 69

Multiple Choice

When the allowance method for recognising uncollectible accounts receivable is used, the allowance account will have a positive balance at the end of the period if:

• A) the write-offs during the period exceed the beginning balance.
• B) the write-offs are equal to the balance of the account at the beginning of the period.
• C) the write-offs during the period are less than the beginning balance.
• D) the write-offs are equal to the difference between the beginning and the ending balance of the account.

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Definitions:

Activity Rate

The rate determining the cost allocation in activity-based costing, which distributes overhead expenses to products or services according to particular activities.

Activity-Based Costing

A pricing approach that determines and allocates the expenses of each activity within an organization to all products and services based on their actual usage.

Labor-Related

Pertains to issues, costs, or statistics connected with the workforce or employees of a company.

Activity Rate

In cost accounting, the rate charged for a particular business activity, often used in activity-based costing to allocate costs to products or services.