The Type of Depreciation in Which a Fixed Yearly Sum

question 66

Multiple Choice

The type of depreciation in which a fixed yearly sum is subtracted from the depreciable value of the property is called

• A) sum of the years digits.
• B) straight-line.
• C) double declining balance.
• D) accelerated.

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Definitions:

Uncollectible Receivables

Accounts receivable that a company does not expect to collect due to customers’ inability to pay, often written off as a bad debt expense.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total amount of accounts receivable to reflect the estimated portion that may not be collected.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Aging

A method used to categorize accounts receivable based on the length of time an invoice has been outstanding, helping businesses to manage and collect debts effectively.