Which of the Following Describes a Company Growing by Combining

question 121

Multiple Choice

Which of the following describes a company growing by combining with other organizations in the same industry?

• A) forward vertical integration
• B) backward vertical integration
• C) horizontal integration
• D) unrelated diversification
• E) concentration

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account used to estimate the amount of receivables that may not be collected.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect, typically due to customers' inability to pay.

General Journal Entries

Records of financial transactions in the general journal, documenting the details of business transactions and their impact on the accounts.

Allowance Method

An accounting technique used to estimate the amount of bad debts that will not be collected from customers.