Which One of the Approaches for the Allowance Method of Accounting

question 36

Multiple Choice

Which one of the approaches for the allowance method of accounting for bad debts emphasizes the net realizable value of accounts receivable on the balance sheet?

• A)The percentage of accounts receivable approach
• B)The percentage of net credit sales approach
• C)The direct write-off method
• D)The uncollectible approach

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Definitions:

Equality

A principle regarding the equal treatment and impartiality towards all individuals, often in the context of rights, status, and opportunities.

Debt

An obligation of repayment owed by one party (the debtor) to a second party (the creditor); in most cases this refers to financial assets being owed.

U.S. Middle Class

A socioeconomic group in the United States characterized by moderate levels of income, educational attainment, and occupational status, often considered the backbone of American society.

Max Weber

A German sociologist, considered one of the founders of sociology, known for his work on rationalization, secularization, and the structure of authority.