Under the Allowance Method, When an Account Receivable Is Written

question 127

Multiple Choice

Under the allowance method, when an account receivable is written off, the journal entry:

• A) violates the matching principle.
• B) will decrease net income.
• C) will decrease total current assets.
• D) will have no effect on net accounts receivable.

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Definitions:

Intrinsic Rewards

In expectancy theory, the internal factors related to the value of work, including the amount of creativity allowed, the degree of responsibility, and the satisfaction of helping others.

Satisfaction

A state of fulfillment or contentment resulting from achieving what one desires or from the successful resolution of needs or challenges.

ERG Theory

A theory in psychology proposed by Clayton Alderfer that categorizes human needs into three groups: existence, relatedness, and growth.

Frustration-Regression Principle

A concept suggesting that when an individual encounters obstacles or frustrations, they may revert to earlier behaviors as a coping mechanism.