The Aging-Of-Receivables Method for Estimating Uncollectible Accounts

question 33

Multiple Choice

The aging-of-receivables method for estimating uncollectible accounts:

• A)results in an immediate write-off of receivables that are more than 90 days past due.
• B)focuses on the amount of receivables that will not be collected.
• C)uses a balance sheet approach.
• D)B and C.

Differentiate between types of income statements and the placement of revenue and expenses.

Identify the primary sources of revenue for different types of companies.

Recognize the importance of detailed inventory records in both inventory systems.

Understand the concept and method to calculate net income.

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Definitions:

Liability

The state of being responsible for something, especially by law.

Tort

A civil wrong causing harm to someone, for which the injured party can seek legal remedies or damages.

Apparent Authority

A situation where a third party reasonably believes that an agent has the authority to act on behalf of the principal, even if such authority has not been formally granted.

Terminate

To bring an end to something, such as a contract, employment, or operation, either by mutual agreement, fulfillment of terms, or through unilateral action.