Following Generally Accepted Accounting Principles,two Methods to Estimate Uncollectible Accounts

question 183

True/False

Following Generally Accepted Accounting Principles,two methods to estimate uncollectible accounts receivable are the direct write-off method and the allowance method.

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Definitions:

Implicit Interest Rate

The rate of interest implied in the lease payments or in other financial arrangements, not explicitly stated.

Residual Value

The estimated value of an asset at the end of its lease term or useful life.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an even manner.

Fair Value

The amount one would get from selling an asset or the cost to transfer a liability in a smooth transaction among market participants on the date of valuation.