When Evaluating the Collectability of Accounts Receivable

question 55

Multiple Choice

When evaluating the collectability of accounts receivable:

• A) the uncollectible-account expense is a contra account.
• B) the allowance for uncollectible accounts is an operating expense in the selling, general and administrative category.
• C) the allowance method uses estimates developed from the company's collection experience.
• D) the direct write-off method uses the allowance for uncollectible accounts to record bad debts.

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Definitions:

Outsourcing

The practice of hiring third-party vendors to perform tasks, handle operations or provide services that are either difficult to manage or outside of the business's core competencies.

Institute For Supply Management

A non-profit organization that conducts research and publishes reports on supply management practices.

Ethical Supply Management

The practice of considering moral and ethical principles in the management and procurement processes of the supply chain, focusing on sustainability, fair labor practices, and responsible sourcing.

Ethical Issues

Concerns or dilemmas that involve right or wrong behavior in the business realm.