Under the Allowance Method,when a Receivable That Had Been Previously

question 153

Multiple Choice

Under the allowance method,when a receivable that had been previously written off is collected:

• A)Income is recognized.
• B)An expense is reduced.
• C)Net income is not affected.
• D)Net assets are increased.

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Definitions:

Profit

The financial gain realized when the revenue from selling goods or services exceeds the cost of production.

Marginal Cost

Incremental expenditure incurred by manufacturing an additional unit of a product or service.

Selling Price

The price at which a product or service is sold to customers.

Marginal Cost

Expenditure incurred in producing an additional unit of a good or service.