Crouse Company Applies the Consistency Convention

question 22

Multiple Choice

Crouse Company applies the consistency convention.What does this mean?

• A)Crouse Co.uses the same names for all its expenses as its competitors.
• B)Crouse Co.has selected certain accounting principles that can never be changed.
• C)Crouse Co.applies the same accounting principles each accounting period.
• D)Crouse Co.applies the same accounting principles as it competitors.

---

Definitions:

Uncollectible Accounts

Accounts receivable that are recognized as unlikely to be collected, leading to their write-off as bad debts.

Bad Debt Expense

An expense reported on the income statement, reflecting the cost of credit sales that are not expected to be collected.

Terms 2/10 N/30

A common payment term in business indicating that a buyer can take a 2% discount on the invoice price if payment is made within 10 days; otherwise, the full invoice price is due in 30 days.

Merchandise Returns

Goods returned by the buyer to the seller, often due to defects, dissatisfaction, or other reasons, leading to a reversal of the sale.