Under the Allowance Method,when a Year-End Adjustment Is Made for Estimated

question 92

Multiple Choice

Under the allowance method,when a year-end adjustment is made for estimated uncollectible accounts,

• A)total assets decrease.
• B)liabilities increase.
• C)total assets are unchanged.
• D)net income is unchanged.

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Definitions:

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenues, indicating the company's profitability.

Total Expenses

The sum of all costs and expenses incurred by a business during a specific period, including operating and non-operating expenses.

Total Revenues

The complete amount of income generated by a business through its activities, before any costs or expenses are deducted.

Private Accountants

Accountants employed by a single company to handle its financial records, analysis, and reporting.