A Stakeholder Is

question 46

Multiple Choice

A stakeholder is:

• A) any person or entity that owns shares of stock of a corporation.
• B) any person or entity that has voting rights based on stock ownership of a corporation.
• C) a person who initially started a firm and currently has management control over the cash flows of the firm due to his/her current ownership of company stock.
• D) a creditor to whom the firm currently owes money and who consequently has a claim on the cash flows of the firm.
• E) any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of the firm.

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Definitions:

Aging

The process of categorizing accounts receivable based on how long an invoice has been outstanding to determine credit risk.

Direct Write-Off Method

An accounting method used to recognize bad debts at the point when specific accounts are deemed uncollectible, directly impacting the income statement.

Allowance Method

An accounting technique used to manage accounts receivable and bad debt by estimating uncollectible accounts at the end of each period.

Write Off

The accounting action of recognizing that an asset has reduced in value and reporting its loss.