Assume the Hart Company Uses the Allowance Method

question 4

Multiple Choice

Assume the Hart Company uses the allowance method.When the company writes off a customer's account balance that has no chance of collection:

• A) total assets will decrease.
• B) total liabilities will increase.
• C) expenses and revenues will both increase.
• D) total assets will decrease and expenses will increase.

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Definitions:

Proofs And Security Measures

Proofs and security measures refer to the techniques and processes employed to verify the accuracy of financial information and protect it against theft, fraud, and other risks.

Petty Cash Fund

A small amount of cash on hand used for paying minor expenses.

Accounts Payable

Liabilities owed by a business to its suppliers or creditors for goods or services received.

Cost-Benefit Considerations

The process of weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option.