Which of the Following Account Names Should Not Be Used

question 98

Multiple Choice

Which of the following account names should not be used in modern practice?

• A) Reserve for Bad Debts
• B) Allowance for Bad Debts
• C) Uncollectible Accounts Expense
• D) Allowance for Doubtful Accounts

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation, with voting rights at shareholder meetings.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a portion of the company's profits.

Earnings Per Share

A financial ratio that calculates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company’s profitability.

Noncumulative Preferred Stock

A type of preferred stock that does not entitle the holder to claim dividend payments that were missed or not declared by the company.