The Securities and Exchange Commission Requires Public Companies to Disclose

question 77

True/False

The Securities and Exchange Commission requires public companies to disclose the ratio of the compensation of the chief executive officer (CEO) to the median compensation of its employees in proxy statements and in annual reports requiring executive compensation disclosure.

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Definitions:

Allowance for Doubtful Accounts

A contra account that estimates the portion of accounts receivable which may not be collectible.

Uncollectible Accounts

Refers to debts owed to a company that it does not expect to be paid due to various reasons such as bankruptcy of the debtor.

Bad Debt Expense

An expense account that represents amounts deemed uncollectible from credit sales and highlights credit losses in financial statements.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts is a contra-asset account that reflects the estimated amount of accounts receivable which may not be collectible.