If the Allowance Method of Accounting for Uncollectible Receivables Is

question 124

Multiple Choice

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

• A) Uncollectible Accounts Expense
• B) Accounts Receivable
• C) Allowance for Doubtful Accounts
• D) Interest Expense

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Definitions:

Moral Hazard

A situation where one party is more likely to take risks because another party bears the consequences of those risks.

Alter Behavior

The process of changing or modifying actions, habits, or conduct.

Production Subsidies

Financial support given by the government to producers or manufacturers to help reduce the cost of producing goods or services.

External Costs

These are costs of a transaction that affect someone who did not choose to incur that cost, often not reflected in the market prices.