Under the Allowance Method, the Cash Realizable Value of Receivables

question 128

True/False

Under the allowance method, the cash realizable value of receivables is the same both before and after an account has been written off.

---

Definitions:

Capital Gains Tax

A tax on the profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale.

Dividends

Payments made to shareholders out of a company's profits, usually on a quarterly basis, representing a portion of the company’s earnings distributed to its stockholders.

Cash

Cash refers to money in the physical form of currency, such as banknotes and coins, which represents immediate value for transactions or reserves.

Stock

Financial instruments representing ownership in a company and a claim on a portion of its assets and earnings.