Which of the Following Is Not a Significant Difference Between

question 24

Multiple Choice

Which of the following is not a significant difference between the allowance method and the direct write-off method?

• A)One method requires writing off of uncollectible accounts and the other does not.
• B)One method conforms to GAAP and the other typically does not.
• C)One method reports net realizable value on the balance sheet and the other does not.
• D)One method requires the estimation of uncollectible accounts and the other does not.

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Definitions:

Budgeted Sales

It represents the expected amount of sales as planned for a future period, influenced by factors like past sales, market trends, and marketing strategies.

Master Budget

A comprehensive financial planning document that includes all of a company’s budgets and financial plans, consolidating them into an overall budget.

Raw Materials

Raw materials are the basic, unprocessed inputs used in the manufacture of products.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been sold.