Which of the Following Would Offer the Best Evidence of Owning

question 67

Multiple Choice

Which of the following would offer the best evidence of owning real estate as of the balance sheet date?

• A) Property insurance policies
• B) Paid real estate tax bills
• C) Acquisition documents
• D) Cash disbursements register

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Definitions:

Percent of Sales Method

A financial forecasting technique that estimates certain balance sheet and income statement items as a fixed percentage of projected sales.

Uncollectible Expenses

Costs that a business incurs from credits extended to customers that are not expected to be paid back, often recognized as bad debt expense.

Credit Sales

Sales made by a business where the payment is deferred to a later date, typically recorded as accounts receivable until payment is received.

Debit Balance

An account balance that occurs when the total of debits in an account exceeds the total of credits, typical for asset and expense accounts.