If a Company Uses a Percentage of Net Sales in Computing

question 15

Multiple Choice

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

• A)No valuation allowance will be required.
• B)The relationship between revenue and expenses is being stressed more than the valuation of receivables at the balance sheet date.
• C)The existing balance in the Allowance for Doubtful Accounts will be increased sufficiently to equal the probable loss indicated by the percentage of net sales computation.
• D)Any past-due accounts will be listed as a separate item in the balance sheet.

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Definitions:

Freud

Sigmund Freud was an Austrian neurologist known as the founding father of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Psychic Energy

A concept in psychoanalytic theory referring to the force driving human behavior and emotional processes.

Repression

In psychoanalytic theory, the defense mechanism that banishes the past from current awareness.

Conscious Awareness

The state of being aware of one's thoughts, feelings, and surroundings; the aspect of the mind that is directly accessible to introspection.