The Allowance for Doubtful Accounts Is Adjusted

question 47

Multiple Choice

The Allowance for Doubtful Accounts is adjusted:

• A)at the end of each accounting period.
• B)each time a customer's debt is satisfied.
• C)within one year of granting credit to a customer.
• D)each time a customer is granted credit.

---

Definitions:

Depreciation

A technique for distributing the expense of a physical asset throughout its period of usability.

Net Income

Net income is the total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profitability.

Operating Cash Flows

Cash generated from a company's normal business operations, indicating its ability to generate enough cash to maintain or expand operations.

Sunk Cost

Expenses that have been paid and cannot be retrieved, and therefore, should not impact upcoming business strategies.