When Accounting for Uncollectible Accounts

question 63

Multiple Choice

When accounting for uncollectible accounts,

• A)if the percentage of sales method is in use, any existing balance in the Allowance for Doubtful Accounts is the amount used in the adjusting entry
• B)in current accounting practice, the most frequently used method of recognizing bad debts is the direct write-off method
• C)writing off a specific receivable does not reduce the current ratio if the percentage of ending accounts receivable method is in use
• D)an aging analysis results in reporting accounts receivable at their historical cost on the balance sheet

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Definitions:

Relatively Inexpensive

Describes goods or services offered at a low price in comparison to their perceived value or the prices of competing products.

Subject of Price

The consideration and analysis of pricing in relation to a product or service, focusing on factors like setting, competition, and value to the consumer.

Salesperson

An individual who sells products or services to customers, often working on commission and striving to meet sales targets.

Assorted Bears

A collection of bears that differ in type, color, size, or shape, often referred to in the context of products like candy or toys.