What Assumption Does a Company Make When It Recognizes Bad

question 44

Multiple Choice

What assumption does a company make when it recognizes bad debt expense?

• A)all accounts receivable will be collected
• B)when a company has credit sales,some customers will not pay
• C)the bad debt expense associated with sales revenue should be recognized in the year following the sale
• D)the bad debt expense associated with sales revenue should be recognized in the same year as the revenue
• E)both A and C
• F)both B and D

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Definitions:

Cyclothymic Disorder

A mood disorder characterized by periods of hypomanic and depressive symptoms that are not severe enough to qualify as bipolar disorder.

Unipolar Depression

A major depressive disorder characterized by a persistent feeling of sadness or a lack of interest in external stimuli, differing from bipolar disorder by the absence of manic or hypomanic episodes.

Dysthymic Symptoms

long-term, chronic symptoms of depression that are less severe than major depressive disorder.

Mania

A mental state characterized by extreme energy, euphoria, hyperactivity, and a reduced need for sleep, often seen in bipolar disorder.