An Interlocking Directorate Is

question 16

Multiple Choice

An interlocking directorate is:

• A) the shared beliefs and behaviors within a social group.
• B) the ways in which power and authority are distributed within an organization.
• C) when members of corporate boards sit on the board of directors for multiple companies.
• D) a set of social relations held together by ties between individuals.

---

Definitions:

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect.

Direct Write-Off Method

The method of writing off uncollectibles when they occur and thus not using the Allowance for Doubtful Accounts. This method does not fulfill the matching principle of accrual accounting.

Income Statement Method

A technique used to create a company's income statement to report earnings and financial performance.

Income Statement Approach

A method that estimates the amount of Bad Debts Expense that will result based on a percentage of net credit sales for the period. The amount of the expected bad debt is added to the existing balance of Allowance for Doubtful Accounts.