With SFAS No

question 52

True/False

With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach.

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Definitions:

Allowance Account

An account used to record reductions in the book value of accounts receivable due to potential future defaults on payments.

Doubtful Accounts

Doubtful accounts represent receivables that a company is uncertain to collect, typically categorized separately to reflect potential losses.

Cash Discount

A reduction in the invoice amount by the seller if the buyer pays their bill within a specified time frame, incentivizing prompt payment.

Retail Customers

Individuals who purchase goods and services for personal use from retailers, as opposed to wholesale customers.