Under the Allowance Method,the Charge Off of a Specific Account

question 35

True/False

Under the allowance method,the charge off of a specific account receivable does not influence the income statement nor the net receivable on the balance sheet at the time of the charge off.

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Definitions:

Trading Securities

Financial instruments that are purchased and held primarily for sale in the near term to generate income on short-term price differences.

Fair Value

The estimated price at which an asset or liability could be traded in an orderly transaction between market participants at the measurement date.

Trading Securities

Financial assets that a company holds for the purpose of selling them in the short term to generate profit.

Fair Value

An estimated market value of an asset or liability, based on current prices in an active market or valuation techniques.