A No-Load Mutual Fund

question 76

Multiple Choice

A no-load mutual fund

• A) May allow investors to pay a sales charge.
• B) Charges commission when you buy shares.
• C) Uses salespeople to sell the funds.
• D) Is available only via the Internet.
• E) Can charge a 12b-1 fee of up to 0.25% of its assets.

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Definitions:

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collected, which is used as a contra asset to adjust the net value of accounts receivable.

Direct Write-off Method

An accounting approach where uncollectable debts are directly written off against income at the time they are deemed non-recoverable.

Percentage of Sales Method

A financial forecasting model that bases future sales, expenses, and other financial elements as a percentage of sales revenue.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.