Which of the Following Statements Concerning the Estimation of Bad

question 80

Multiple Choice

Which of the following statements concerning the estimation of bad debt expense by using a percentage of credit sales is incorrect?

• A) Produces the same results, as an aging of accounts receivable.
• B) Causes an adjustment to the allowance account without regard to the balance in that account immediately prior to the adjustment.
• C) Is based primarily on the matching principle.
• D) Emphasizes the income statement.
• E) Only incidentally measures accounts receivable at net realizable value.

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Definitions:

Projective Tests

Types of personality tests in which individuals are presented with ambiguous stimuli and their responses are interpreted to uncover underlying thoughts, feelings, and traits.

Direct Observation

Assessment in which the professional observes the client engaged in ordinary, day-to-day behavior in either a clinical or natural setting.

Interviews

A method of gathering information through direct communication involving conversational exchange.

Psychotic Individuals

Persons experiencing psychosis, typically characterized by a loss of contact with reality, such as delusions or hallucinations.