Under GAAP,an Entry Should Be Made to the Bad Debt

question 36

Multiple Choice

Under GAAP,an entry should be made to the Bad Debt Expense account

• A) when an account receivable with terms 2/10,n30 is past thirty days due.
• B) when an account receivable previously written off is determined to be collectible.
• C) when an account receivable is determined not to be collectible and is written off.
• D) in the period when a sale is made and not when the receivable associated with the sale is determined to be uncollectible.

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Definitions:

Collectively Exhaustive

A condition where all possible outcomes or cases are considered together, covering every eventuality.

Probability

A measure of the likelihood of a given event occurring, often expressed as a number between 0 and 1.

Mutually Exclusive

Events or propositions that cannot both be true or occur at the same time, implying the occurrence of one event excludes the occurrence of the other.

P(A)

The probability of event A occurring.