Houff Company Uses the Allowance Method to Account for Uncollectible

question 34

Multiple Choice

Houff Company uses the allowance method to account for uncollectible accounts.An account that had been previously written-off as uncollectible was recovered.How would the recovery affect the company's accounting equation?

• A)Increase assets and increase equity.
• B)Increase assets and decrease liabilities.
• C)Reduce liabilities and increase equity.
• D)Have no effect on assets,liabilities or equity.

Analyze partial payment scenarios and determine the amount credited to customer accounts.

Apply knowledge of terms of sale to compute discounts and remittances.

Understand the fundamental differences between organic and inorganic compounds.

Distinguish among isotopes, particularly between stable isotopes and radioisotopes.

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Definitions:

Equipment

Tangible assets used in operations, such as machinery or office hardware, which are not intended for sale in the regular course of business.

Cash Flow

The net amount of cash being transferred into and out of a business, especially in terms of operational, investing, and financing activities.

Operating Activities

Activities directly connected to the primary revenue-producing operations of a company, reported in the statement of cash flows.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset as it is used.