Estimated Uncollectible Tax Amounts Are Recorded in the General Fund

question 64

True/False

Estimated uncollectible tax amounts are recorded in the General Fund general journal as a reduction in revenues and in the governmental activities journal as a bad debt expense.

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Definitions:

NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period of time.

Interest Rates

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR).

After-Tax Annual Interest Savings

The amount of money saved annually on interest payments after accounting for the effects of taxes, often referenced in discussions of debt refinancing or consolidation.

Refunding

The process of replacing an existing debt with a new debt, often to take advantage of more favorable borrowing terms.