Which of the Following Is Not True

question 11

Multiple Choice

Which of the following is not true?

• A)Firms report accounts receivable they expect to collect within one year at the amount of cash the firms expect to receive.
• B)Both U.S.GAAP and IFRS require firms with significant uncollectible accounts receivable to estimate the amount of uncollectible accounts related to a particular period's sales and recognize that amount as bad debt expense in the same period as the related revenues.
• C)Firms typically use a contra account to accounts receivable, such as Allowance for Uncollectibles, to reflect the amount of accounts receivable they do not expect to collect.
• D)The entry to recognize estimated uncollectible amounts involves a debit to Bad Debt Expense and a credit to Allowance for Uncollectibles.
• E)The write-off of a particular customer's account that becomes uncollectible involves a debit to Accounts Receivable and a credit to Allowance for Uncollectibles .

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Definitions:

Mixing Department

refers to a section within a manufacturing facility where ingredients or components are combined to produce a product, vital in industries such as food processing and chemicals.

Direct Labor Hours

The total time workers spend creating a product or service, directly associated with the production process.

Plantwide Overhead Rate

A single overhead rate calculated by dividing all factory overhead costs by a base, applied across all production activities within a plant.

Machine Hours

A measure of the amount of time a machine is used in the production process, often used as a basis for allocating overhead costs.