A Company with Significant Amounts of Accounts Receivable, Experiences Uncollectible

question 104

Multiple Choice

A company with significant amounts of accounts receivable, experiences uncollectible accounts from time to time. If the company uses the direct write-off method, the effect of writing off of an uncollectible receivable will be a(n) :

• A)reduction in net income.
• B)nil on net income.
• C)increase in total assets.
• D)generation of positive cash flow.

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Definitions:

Predisposition

A natural inclination or tendency to behave in a certain way or to develop a particular condition.

Gay Parents

Same-sex couples who are raising children together.

Homosexual

A term describing people who are romantically or sexually attracted to individuals of the same gender.

Kinsey

Refers to Alfred Kinsey, a biologist and sexologist who researched human sexuality and published significant works on the subject in the mid-20th century.