When a Company That Uses the Allowance Method Writes Off

question 63

Multiple Choice

When a company that uses the allowance method writes off an actual bad debt:

• A)total assets decrease.
• B)total liabilities increase.
• C)total expenses increase and total revenues increase.
• D)total assets,revenue,and expenses remain the same.

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Definitions:

Information Technology

The use of computers, storage, networking and other physical devices, infrastructure, and processes to create, process, store, secure, and exchange all forms of electronic data.

Operating Departments

Divisions within an organization directly involved in its core business activities, such as production or sales.

Computer Workstations

High-performance computers designed for technical or scientific applications, often used in professional environments for computing-intensive tasks.

Direct Method

A way of allocating service departments' costs directly to producing departments without any intermediate allocations, used in cost accounting.