Under the Allowance Method, When a Year-End Adjustment Is Made

question 82

Multiple Choice

Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

• A)total assets decrease.
• B)total assets are unchanged.
• C)net income is unchanged.
• D)liabilities decrease.

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Definitions:

Financial Position

A snapshot of an entity's finances at a particular time, including assets, liabilities, and equity, showing its economic standing.

Liabilities

Financial obligations or debts that a business or individual owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Assets

Items of value owned by a person or company, including physical property, financial holdings, and intangible items that can be converted into cash.

Cash Budgets

Financial plans that forecast a company's cash inflows, outflows, and net cash balance for a specific period.