The Primary Reasons for Developing a Conceptual Framework Is

question 41

Multiple Choice

The primary reasons for developing a conceptual framework is:

• A)To enable regulators to develop accounting standards that are consistent and logically formulated
• B)To provide guidance to accountants in areas where no standard exists
• C)To reduce the number of accounting standards needed
• D)To assist auditors

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables balance to reflect the amount that is expected to be uncollectible.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is an accounting technique to estimate the amount of receivables that are expected not to be collected, acting as a contra account to accounts receivable.

Bad Debt Expense

An expense reported on the income statement, representing the estimated amount of credit sales that are not expected to be collected due to customer default.

Uncollectible Receivables

Refers to money owed to a company that it is unable to collect from its debtors, often considered as a bad debt expense.