Which of the Following Is Not True About the Allowance

question 105

Multiple Choice

Which of the following is not true about the Allowance for Doubtful Accounts?

• A) It is a contra asset account.
• B) It is a liability account.
• C) It is used instead of reducing accounts receivable directly.
• D) It is debited when uncollectible accounts are written off.
• E) It is credited when bad debts expense is estimated and recorded.

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Definitions:

Government Policy

Actions or inactions chosen by government officials to address specific public issues, ranging from economic regulations to social welfare programs.

Natural Rate

Often refers to the natural rate of unemployment, which is the level of unemployment consistent with a stable rate of inflation, or the equilibrium rate unaffected by short-term fluctuations.

Fully Employed

Refers to a situation where all available labor resources are being used in the most economically efficient way.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a specific time period.