Listed Below Are Ten Terms Followed by a List of Phrases

question 6

Multiple Choice

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term placing the letter designating the term in the space provided.
-_____ Recognizes bad debts when accounts become uncollectible.

• A)Accounts receivable
• B)Allowance method
• C)No effect
• D)Direct write-off method
• E)Net realizable value
• F)Aging method
• G)Bad debt expense
• H)Receivables written off
• I)Decrease assets and increase expenses
• J)Allowance for uncollectible accounts

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Definitions:

Private Cost

The costs directly incurred by individuals or companies involved in conducting an economic activity, excluding any external effects on others.

External Cost

A cost of a transaction that affects someone who did not choose to incur that cost, often associated with negative side effects of economic activities not reflected in market prices.

Social-Cost Curve

A graphical representation showing the total cost to society of producing various levels of a particular good or service, including both private costs and external costs.

Demand Curve

A graphical representation in economics showing the relationship between the price of a specific good and the amount of it that consumers are willing and able to purchase at various prices.