If the Direct Charge-Off Method of Accounting for Uncollectible Receivables

question 38

Multiple Choice

If the direct charge-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

• A)Accounts Receivable
• B)Allowance for Doubtful Accounts
• C)Uncollectible Accounts Expense
• D)Uncollectible Accounts Payable

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Definitions:

WACC

The Weighted Average Cost of Capital provides a measure for a company's cost of capital, where each type of capital is assigned a weight based on its proportion.

NPV

Net Present Value (NPV) is a financial metric that calculates the difference between the present value of cash inflows and outflows of a project or investment over time.

Capital-Labor Ratio

The ratio of the total value of capital equipment to the labor force, indicating the level of capital intensity in production processes.

Productivity Growth

The increase in the efficiency of production in an economy, typically measured as the output per hour worked.