Explain the Computation of the Length of the Operating Cycle

question 149

Essay

Explain the computation of the length of the operating cycle. assuming use of the allowance method.
a)The Allowance for Doubtful Accounts is a contra asset account.b)The net realizable value of receivables is the difference between the ending balance of accounts receivable and the ending balance in the allowance for doubtful accounts.c)The recognition of uncollectible accounts expense at the end of an accounting period does not affect the net realizable value of accounts receivable.d)The write-off of an uncollectible account reduces the net realizable value of accounts receivable.e)The write-off of an uncollectible account does not affect the amount of stockholders' equity.

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