The NACUBO Financial Accounting and Reporting Manual Treats Estimates of Uncollectible

question 101

Multiple Choice

The NACUBO Financial Accounting and Reporting Manual treats estimates of uncollectible accounts for colleges and universities as:

• A) Bad debt expense
• B) Reduction in revenue
• C) Other financing uses
• D) None of the above

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Definitions:

Quick Assets

Highly liquid assets that can be quickly converted into cash without losing value, often including cash, marketable securities, and accounts receivable.

Current Assets

Items of value that are likely to be turned into cash, sold off, or used up within the span of one year or the length of the operating cycle, whichever period extends further.

Current Liabilities

Obligations that a company needs to pay off within one year or within its operating cycle, whichever is longer.

Credit Terms

Conditions under which a seller extends credit to a buyer, detailing the repayment time frame and any interest or penalties for late payment.