The Aging-Of-Receivables Method Is

question 101

Multiple Choice

The aging-of-receivables method is:

• A) not an acceptable method of estimating bad debts.
• B) a balance sheet approach, since it focuses on accounts receivable.
• C) an income statement approach, since it focuses on the amount of expense to be reported on the income statement.
• D) not concerned with the balance in the Allowance for Doubtful Accounts.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Point B

A specific position or location on a graph or diagram, used often in economic models to denote a particular outcome or situation.

Point A

A specific position or location often referenced in economic models or graphs to illustrate a particular scenario or outcome.

Opportunity Cost

The budgetary repercussion of passing on the subsequent top pick when decisions are taken.