Consider the Following Data Concerning the Performance of a Forecasting

question 143

Multiple Choice

Consider the following data concerning the performance of a forecasting method.

• A) The CFE is greater than 100, and the MAD is less than 50.
• B) The CFE is less than 100, and the MAD is less than 50.
• C) The CFE is less than 100, and the MAD is greater than 50.
• D) The CFE is greater than 100, and the MAD is greater than 50.

---

Definitions:

Uncollectible Receivables

Receivables from sales or loans that are not expected to be collected, often written off as bad debts.

Estimate

An approximation or educated guess used to project future financial outcomes or the potential costs of projects.

Direct Write-off

The direct write-off method is an accounting practice where uncollectible debts are written off as an expense only when they are deemed unrecoverable.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and adjust the carrying value of the accounts.