A Write Off of Specific Accounts Receivable Under the Allowance

question 39

Multiple Choice

A write off of specific accounts receivable under the allowance method

• A)increases bad debt expense for the accounting period.
• B)should occur on the last day of the accounting period.
• C)decreases the cash realizable value of accounts receivable.
• D)should be formally approved by an authorized employee.

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Definitions:

Fixed Costs

Expenses that remain constant regardless of the amount of output or sales, like lease payments, wages, and premiums.

Peak-period Capacity

The maximum output a business can produce in a short period when demand is the highest, often requiring efficient use of resources.

Fabrication Department

A specialized section of a manufacturing company where raw materials are assembled, shaped, or processed into finished goods.

Logistics Department

A segment within a company responsible for managing the efficient flow of goods, services, and information from point of origin to point of consumption to meet customer requirements.