The Gain or Loss on an Asset Purchased on March

question 90

True/False

The gain or loss on an asset purchased on March 31,2016,and sold on March 31,2017,is classified as short-term.

---

Definitions:

Allowance for Doubtful Accounts

An account that offsets assets, designed to predict the amount of a company’s accounts receivable that is likely to be uncollectible.

Normal Balance

The side (debit or credit) of an account that is positive or increasing in nature, depending on the type of account.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Uncollectibles

Financial term referring to debts or receivables that are deemed unlikely to be collected and thus written off.