GAAP Requires Most Companies to Use the ________

question 97

Multiple Choice

GAAP requires most companies to use the ________.

• A)direct write-off method to estimate bad debts
• B)allowance method to estimate bad debts
• C)amortization method to estimate bad debts
• D)360-day method to estimate bad debts

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Definitions:

Flexible Budget

A budget designed to change in response to variations in volume or activity levels.

Food

A substance consumed by living organisms to provide nutritional support, primarily obtained through plants, animals, or fermentation.

Supplies

Items used in the operation of a business or manufacturing process, which are not directly associated with the products being made.

Net Operating Income

The financial metric that calculates a company's profitability from its normal business operations, deducting operating expenses from the revenue.