The Collection of an Account That Had Been Previously Written

question 181

Multiple Choice

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

• A) will increase net income in the period it is collected
• B) will decrease net income in the period it is collected
• C) does not affect net income in the period it is collected
• D) requires a correcting entry for the period in which the account was written off

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Definitions:

Capital Goods

Are tangible assets such as buildings, machinery, equipment, vehicles, and tools that an organization uses to produce goods or services.

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for every possible quantity of another good produced, given the available resources and technology.

Consumer Goods

Products and services that are purchased for personal use or consumption by the general public.

Capital Goods

Goods that are used in producing other goods and services rather than being bought by consumers.