​The Ways to Address Agency Costs Include All EXCEPT

question 69

Multiple Choice

​The ways to address agency costs include all EXCEPT

• A)​running background checks on prospective employees
• B)requiring employees to punch time clocks
• C)instituting longer work days
• D)​replacing closed offices with cubical office spaces

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Definitions:

Bad Debts Expense

A non-cash expense that represents accounts receivable that a company no longer expects to collect, indicating customers are unlikely to pay their outstanding debts.

Allowance Method

An accounting technique used to estimate and account for potential uncollectible accounts receivable as an expense against current period income.

Bad Debts Expense

An expense recognized when it is judged that some accounts receivable cannot be collected, reflecting the cost of credit sales that will not turn into cash.

Allowance for Doubtful Accounts

A reserve account used to estimate the amount of receivables that may not be collectible.