Which of the Following Accounts Are Included in Working Capital

question 47

Multiple Choice

Which of the following accounts are included in working capital management?
I.accounts payable
II.accounts receivable
III.fixed assets
IV.inventory

• A)I and II only
• B)I and III only
• C)II and IV only
• D)I, II, and IV only
• E)II, III, and IV only

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Definitions:

Uncollectible Accounts

Refers to receivables that are deemed unlikely to be collected, indicating potential losses for a company.

Allowance for Doubtful Accounts

An accounting provision made by a company to account for accounts receivable that might not be collected.

Bad Debts Expense

Financial accounting charge for accounts receivable that a company does not expect to collect.

Allowance Method

The Allowance Method is an accounting technique that estimates and accounts for potential uncollected receivables or bad debt expenses.