Bad Debt Expense Is Recognized in the Same Accounting Period

question 45

Multiple Choice

Bad debt expense is recognized in the same accounting period as the revenue that is related to the receivable because:

• A) the accounts receivable asset should be stated at original cost.
• B) the exact amount of the losses from bad debts is known.
• C) revenues should be stated at realizable value.
• D)all costs incurred in the current period should be subtracted from current period revenues.

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Definitions:

Deficiency Needs

In Maslow's hierarchy of needs, these are the basic requirements for physical and psychological well-being that individuals are motivated to fulfill before achieving higher level growth needs.

Growth Needs

Psychological desires for personal development, improvement, and the achievement of one's potential.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow, structured as a pyramid with the most fundamental needs at the bottom and self-actualization at the top.

Perceived Inequity

A feeling of unfairness that arises when individuals compare their own effort-reward ratio to others'.