An Automobile Manufacturer Generates Approximately One-Half of Its Sales in Two

question 129

Multiple Choice

An automobile manufacturer generates approximately one-half of its sales in two provinces in Canada. What do these provinces constitute for the company?

• A) primary consumer market
• B) core region
• C) secondary market
• D) sales region

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Definitions:

Bad Debts Recovered

When an account receivable has been written off and is recovered, this account, which is in the Other Revenue category, is credited in the direct write-off method if the recovery is in a year following the write-off.

Allowance for Doubtful Accounts

A contra asset account that estimates the portion of receivables that may not be collectible, affecting a company’s net income and assets.

Bad Debts Expense

An expense reported on the income statement, representing the estimated irrecoverable amounts from customers who can no longer pay their obligations.

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid customer invoices directly to the expense account at the time they are deemed uncollectible.