Which of the Following Is True of the Balance Sheet

question 150

Multiple Choice

Which of the following is true of the balance sheet presentation of the Allowance for Bad Debts?

• A)It is reported as a current liability.
• B)It is reported as an operating expense.
• C)It is reported as a separate,independent line item under current assets.
• D)It is shown as a contra account related to accounts receivable.

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Definitions:

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, an indicator used to analyze and compare profitability among companies and industries.

Revenue

Revenue is the total amount of income generated by the sale of goods or services related to a company's primary operations.

Absorption Costing

A costing technique that encompasses both direct and indirect expenses associated with the production in the product's cost.

Contribution Margin

The amount by which sales revenue exceeds variable costs of a product, indicating how much revenue contributes toward covering fixed costs and generating profit.