Under the Allowance Method for Uncollectible Accounts

question 98

Multiple Choice

Under the allowance method for uncollectible accounts,

• A)the recovery of an account receivable previously written off results in a credit to the Bad Debt Expense account.
• B)Bad Debts Expense is debited when an account is deemed uncollectible and must be written off.
• C)the carrying value of receivables is the same both before and after an account has been written off.
• D)the carrying amount of receivables is the same both before and after an account that had previously been written off is recovered.

---

Definitions:

Financial Aid

Money that is made available to students to help pay for their education expenses; it can come in the form of scholarships, grants, loans, and work-study programs.

Price Discrimination

The strategy of selling the same product at different prices to different groups of consumers, based on their willingness to pay or other distinguishing factors.

Arbitrage

The practice of buying and selling the same assets in different markets to take advantage of differing prices for the same asset.

Antitrust Laws

Legislation enacted to prevent monopolies or unfair business practices that restrict free competition, thereby protecting consumers and ensuring a fair market environment.