When Buffalo Bank Required All Customers to Use Its Online

question 73

True/False

When Buffalo Bank required all customers to use its online banking services,over 20 percent of its customers closed their accounts.In this scenario,Buffalo Bank's service fell outside customers' zone of tolerance.

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Definitions:

Bad Debts Recovered

Previously written off debts that have unexpectedly been collected.

Allowance Method

An accounting technique used to estimate and account for bad debts, allowing companies to anticipate uncollectible accounts receivables.

Bad Debts Expense

An expense account reflecting the value of sales that were made on credit and are unlikely to be collected.

Income Statement Approach

A method to estimate bad debts expense by focusing on the income statement and adjusting the allowance for doubtful accounts to reach a desired net realizable value.