When an Account Is Written Off Using the Allowance Method

question 123

Multiple Choice

When an account is written off using the allowance method, the

• A)cash realizable value of total accounts receivable will increase.
• B)net accounts receivable will decrease.
• C)allowance account will increase.
• D)net accounts receivable will stay the same.

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Definitions:

Frictional

Pertaining to the period of time and inefficiency in processes where resources, especially labor, move from one employment to another, contributing to transient joblessness.

Unemployment Rate

The portion of the labor market that is out of work and actively pursuing job opportunities.

Decades

Periods of ten years, used as a measure of time to describe longer trends in history, economics, or demography.

Cyclical Unemployment

This refers to unemployment that occurs due to fluctuations in the economy, often increasing during a recession and decreasing during an economic expansion.