A Method of Estimating Bad Debts That Focuses on the Balance

question 94

Multiple Choice

A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on

• A) Direct write-off
• B) Aging the accounts receivable
• C) Credit sales
• D) Specific accounts determined to be uncollectible

---

Definitions:

Unexplained Variation

The portion of the total variation in a data set that is not accounted for by the statistical model being used.

P-value

The chance of getting results that are as extreme or more extreme than what was actually seen, assuming the null hypothesis holds.

Average Salary

The mean amount of payment earned by employees in a certain period.

Multiple Linear Regression

A statistical technique that models the relationship between a dependent variable and two or more independent variables by fitting a linear equation to observed data.