If a Company Uses a Percentage of Net Sales in Computing

question 97

Multiple Choice

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

• A) No valuation allowance will be required.
• B) The relationship between revenue and expenses is being stressed more than the valuation of receivables at the balance sheet date.
• C) The existing balance in the Allowance for Impairment will be increased sufficiently to equal the probable loss indicated by the percentage of net sales computation.
• D) Any past-due accounts will be listed as a separate item in the balance sheet.

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Definitions:

Personal Power

The influence or authority a person has over others due to their skills, qualities, or personal attributes, as opposed to formal authority.

Interpersonal Contacts

The social and professional interactions that occur between individuals in the workplace or other contexts.

Likeable Personal

Characteristics or qualities that make an individual pleasant and easy to enjoy being around.

Expert Power

Expert power is the capacity to influence other people because of specialised knowledge.