The Allowance for Doubtful Accounts, Which Appears as a Deduction

question 12

Multiple Choice

The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a statement of financial position and which is based on an estimate of bad debts, is an application of the

• A) consistency characteristic.
• B) expense recognition principle.
• C) materiality quality.
• D) revenue recognition principle.

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Definitions:

Agility

The ability to move quickly and easily; in a physical sense, it involves coordination, balance, speed, and reflexive responses.

Cooperative

Pertaining to a group, business, or organization that is owned and run jointly by its members, who share the benefits and responsibilities.

Depressant Drugs

Substances that reduce the activity of the central nervous system and can lead to relaxation, reduced anxiety, or sleepiness.

Psychological Dependence

A condition characterized by a perceived need to continue using a substance due to emotional or psychological reliance, despite potential harm.