An Accounting Issue for Accounts Receivable Is the Timing of Recognition

question 20

Multiple Choice

An accounting issue for accounts receivable is the timing of recognition of the reduction in income caused by the uncollectibility of some accounts.With regard to timing, both U.S.GAAP and IFRS require that a seller recognize an expense for estimated uncollectible accounts receivable in the _____.

• A)period when it recognizes the accounts receivable is uncollectable
• B)period after it recognizes the related revenue
• C)same period when it recognizes the related revenue
• D)period before it recognizes the related revenue
• E)period after it recognizes the accounts receivable is uncollectable

---

Definitions:

Disposable Income

Available financial assets to households for investments and outlays after income taxes have been applied.

Government Spending

Expenditures by government bodies on goods and services, including salaries, infrastructure, and welfare programs.

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Government Expenditure

Government Expenditure includes all government consumption, investment, and transfer payments, such as spending on infrastructure, welfare programs, and public services.