Explain Downsizing, Both in Terms of What It Is and Why

question 69

Essay

Explain downsizing, both in terms of what it is and why it happens.

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Definitions:

Bad Debts Expense

An estimated expense that represents accounts receivable that a company does not expect to collect.

Normal Balance

Normal balance refers to the side of the accounting equation on which increases to an account are recorded, which is debits for asset and expense accounts, and credits for liability, equity, and revenue accounts.

Allowance for Doubtful Accounts

An account that offsets assets, designed to predict the amount of a company’s accounts receivable that is likely to be uncollectible.

Normal Balance

The side (debit or credit) of an account that is positive or increasing in nature, depending on the type of account.