In the Accounts Receivable Subsidiary Ledger the Length of Time

question 35

Multiple Choice

In the accounts receivable subsidiary ledger the length of time the account has been due can be useful to the client and the auditor in preparing the:

• A)trial balance.
• B)working trial balance.
• C)accounts receivable trial balance.
• D)aged accounts receivable trial balance.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly, resulting in equal depreciation expenses per year.

Fixed Asset Turnover Ratio

An efficiency ratio that measures a company's ability to generate net sales from its fixed-asset investments, such as property, plant, and equipment.

Asset Impairment Loss

A charge recognized when the carrying amount of an asset exceeds its recoverable amount, indicating the asset's value has declined.

Net Book Value

The value at which an asset is carried on a balance sheet, calculated as the original cost minus accumulated depreciation and impairment costs.