Under the Allowance Method,if a Customer Makes Payment on a Receivable

question 142

True/False

Under the allowance method,if a customer makes payment on a receivable that has already been written off,the company needs to reverse the write-off to the Allowance for Bad Debts account.

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Definitions:

Actual Costs

The genuine expenses incurred in the production of goods or delivery of services, measured after they occur.

Cost Formulas

Mathematical equations used to calculate the costs associated with different accounting and financial practices.

Flexible Budgets

Budgets that are designed to vary in accordance with changes in the level of activity or output, to provide more accurate costing and planning.

Spending Variance

The difference between the actual amount of the cost and how much the cost should have been, given the actual level of activity. A favorable (unfavorable) spending variance occurs because the cost is lower (higher) than expected, given the actual level of activity for the period.