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:

Organic Matter

Material derived from living organisms, including plants, animals, and their byproducts, containing carbon compounds.

Proteins

are large, complex molecules made up of amino acids that play many critical roles in the body, including catalyzing metabolic reactions, DNA replication, responding to stimuli, and transporting molecules from one location to another.

Cytoplasm

The gel-like substance within a cell, excluding the nucleus, containing organelles and is involved in numerous cellular processes.

Plane

A flat, two-dimensional surface that extends infinitely in all directions.