Under the Allowance Method,which of the Following Does Not Change

question 64

Multiple Choice

Under the allowance method,which of the following does not change the balance in the Accounts Receivable account?

• A)Returns on credit sales.
• B)Collections on customer accounts.
• C)Bad debt expense adjustment.
• D)Write-offs.

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Definitions:

Ending Inventory

Ending inventory refers to the total value of unsold goods that a company holds at the end of an accounting period.

Goods In Transit

Items that have been shipped by a seller but not yet received by the buyer, which can be included in the inventory of either party depending on the shipping terms.

Purchase Discount

is a reduction in the price of goods bought, usually due to early payment by the buyer to the seller.

Perpetual Inventory System

A perpetual inventory system continuously tracks inventory levels and costs, updating records with each receipt or sale of goods.