On the Balance Sheet, the Amount Shown for the Allowance

question 50

Multiple Choice

On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the

• A) Uncollectible accounts expense for the year
• B) total of the accounts receivables written-off during the year
• C) total estimated uncollectible accounts as of the end of the year
• D) sum of all accounts that are past due.

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Definitions:

Scrap Value

The estimated resale value of an asset at the end of its useful life, often considered in depreciation calculations.

Salvage Value

The expected market value an asset will achieve when it is disposed of after its life cycle.

Payback Period

The length of time it takes for an investment to recover its initial cost out of the cash inflows that it generates.

Simple Rate of Return

A method of investment appraisal that calculates the annual incremental net operating income as a percentage of the initial investment.