A Disadvantage of Basing Bad Debt Expense on the Historical

question 83

Multiple Choice

A disadvantage of basing bad debt expense on the historical relationship between actual bad debts and the outstanding accounts receivable balance at the end of the year is that

• A)it may not appropriately match current expenses against current revenues
• B)it provides a reasonable estimate of the accounts receivable net realizable value
• C)it is not a generally accepted accounting procedure
• D)it is an income statement approach

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Definitions:

Need For Cognition

A psychological trait that describes an individual's preference for effortful cognitive activities, essentially enjoying thinking and problem-solving.

Promotion Focus

A motivational state where the primary goal is to achieve positive outcomes and realize aspirations.

Graduation

The ceremony of conferring degrees or diplomas, as at a university, or the act of completing the requirements of a degree or educational program.

Terror Management Theory

A psychological concept suggesting that much of human behavior is motivated by an underlying fear of mortality, leading people to seek self-esteem and adhere to cultural beliefs as a way to manage this fear.