Which of the Following Are Characteristics of an Extraordinary Item

question 21

Multiple Choice

Which of the following are characteristics of an extraordinary item?

• A) Unusual in nature
• B) Infrequent in occurrence
• C) Material in amount
• D) All of the above

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Definitions:

Bad Debt Expense

An expense account representing the estimated uncollectible accounts receivable.

Direct Write-off Method

An accounting method where bad debts are expensed only when specific accounts are deemed uncollectible and written off.

Uncollectible Accounts Expense

Uncollectible accounts expense is the cost associated with receivables that a company does not expect to collect, impacting the net income and accurate representation of receivables.

Allowance Method

An accounting technique used to estimate and account for bad debts or credit losses.