The Allowance Method Based on the Idea That a Given

question 98

Multiple Choice

The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is:

• A) The percent of accounts receivable method.
• B) Factoring method.
• C) The percent of sales method.
• D) Direct write-off method.
• E) The aging of accounts receivable method.

---

Definitions:

Marginal Social Benefit

The additional benefit to society as a whole from producing or consuming one more unit of a good.

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization, characterized by non-excludability and non-rivalry.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service.

Public Good

A good that is non-excludable and non-rivalrous, meaning no one can be effectively excluded from its use, and someone's use of it does not reduce its availability to others.