If a Company Uses a Percentage of Net Sales in Computing

question 15

Multiple Choice

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

• A)No valuation allowance will be required.
• B)The relationship between revenue and expenses is being stressed more than the valuation of receivables at the balance sheet date.
• C)The existing balance in the Allowance for Doubtful Accounts will be increased sufficiently to equal the probable loss indicated by the percentage of net sales computation.
• D)Any past-due accounts will be listed as a separate item in the balance sheet.

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Definitions:

Concubinage

A relationship where a person cohabits with another without being legally married, historically often recognized in various cultures for secondary partners.

Polygamy

A form of marriage involving more than one spouse simultaneously.

Middle Adulthood

A period in human development typically ranging from the ages of 40 to 65, marked by physical, psychological, and social changes.

Biological Aging

The process of becoming older in a deleterious sense, characterized by the gradual deterioration of physiological functions and increased susceptibility to diseases.