To Allow for Debts That Might Prove Bad in the Future

question 13

Multiple Choice

To allow for debts that might prove bad in the future, a business will recognise as an expense in the income statement:

• A)bad debts.
• B)doubtful debts.
• C)allowance for doubtful debts.
• D)allowance for depreciation.

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Definitions:

Bad Mouth

To speak negatively about someone or something, often in a disrespectful or slanderous manner.

Cognitive Dissonance

A psychological state of tension that occurs when an individual holds two conflicting thoughts, beliefs, attitudes, or perceptions simultaneously.

Imbalance

A state of lack of equilibrium or proportion, in physical contexts, emotional states, or relationships.

Self-Handicapping

A strategy where individuals create obstacles to their own success to protect self-esteem in case of failure.