CLV Is a Statistical Estimate Whose Accuracy Depends Upon All

question 70

Multiple Choice

CLV is a statistical estimate whose accuracy depends upon all the following EXCEPT:

• A) The relevance of historical data
• B) The proximity of the horizon
• C) The choice of a discount rate
• D) The accuracy of anticipated account maintenance rates
• E) The customer service strategies

---

Definitions:

Carrying Amount

The net value of an asset or liability recorded on the balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Allowance Account

An account used to adjust the carrying value of accounts receivable to the amount expected to be collected.

Contra Account

An account used in conjunction with another account to adjust or offset its balance.

Allowance Account

An account set aside to cover potential losses from doubtful accounts, reflecting estimated uncollectible receivables.