Which Statement Is Correct About Recording an Allowance for Doubtful

question 5

Multiple Choice

Which statement is correct about recording an allowance for doubtful accounts?

• A)Accounts receivable are not adjusted for known uncollectible amounts.
• B)Net accounts receivable is recalculated when there are changes recorded in the Allowance for Doubtful Accounts contra account.
• C)Comparability is the reason an allowance for doubtful accounts is needed.
• D)An allowance for doubtful accounts does not require estimates or judgments.

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Definitions:

Glandular

Pertaining to glands, often referring to tissues or cells that secrete hormones or other substances.

Plasma

The fluid part of blood holding the blood cells in suspension, primarily composed of water and proteins.

Formed Elements

Refers to the cellular components of blood, including red blood cells, white blood cells, and platelets.

Liquid Portion

Refers to the liquid component of a mixture or substance, often used in a biological context to describe the fluid part of blood (plasma).