The CICA

question 48

Multiple Choice

The CICA:

• A)has primary responsibility for setting the underlying rules of accounting in Canada.
• B)is an entity that regulates issuance of securities in Ontario.
• C)an independent body to develop and establish standards and guidance than govern financial accounting and reporting in Canada.
• D)is an examination of a company's financial statements by an independent auditor.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.

Allowance for Doubtful Accounts

A contra-asset account that estimates the portion of accounts receivable which may not be collected, reducing the reported amount of receivables.

Bad Debt Expense

The cost a company incurs because of the inability to collect payments from customers for credit sales, recognized as an expense.

Uncollectible Accounts

Accounts from which businesses are unable to obtain payment, often leading to writing off these amounts as a bad debt expense.