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Define and Give Examples of the Four Characteristics of Services

question 66

Essay

Define and give examples of the four characteristics of services: intangibility, inseparability, variability, and perishability.


Definitions:

Bad Debts

Amounts owed to a company that are not expected to be paid, often resulting from credit sales to customers who are unable to fulfill their financial obligations.

Inventory Reserve

A provision for unsellable inventory, reflecting a decrease in the value of inventory assets.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect because customers default on their payments.

Allowance for Doubtful Accounts

A contra asset account used to estimate the portion of a company's accounts receivable that may not be collectible.

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