Which Accounting Convention Has the Effect That the Employees Will

question 25

Multiple Choice

Which accounting convention has the effect that the employees will not appear as an asset on the entity's statement of financial position?

• A)Money measurement convention.
• B)Accounting period convention.
• C)Stable monetary unit convention.
• D)Entity convention.

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Definitions:

Uncollectible Accounts

Refers to receivables that a business has determined are unlikely to be collected due to customer default.

Aging

A method used in accounting to categorize a company's accounts receivable according to the duration of time an invoice has been outstanding.

Allowance Account

An account used to reduce the carrying amount of accounts receivable or loans to their net realizable value, reflecting expected losses due to uncollectibility.

Aging

A method used to categorize accounts receivable based on the length of time an invoice has been outstanding.