Which of the Following Statements Is Incorrect

question 9

Multiple Choice

Which of the following statements is incorrect?

• A) A debt is bad as soon as the receivable has passed its due date.
• B) Bad debts are a cost of selling on credit.
• C) An outstanding debt may be turned over to a collection agency.
• D) Bad debts should be deducted as an expense in the same accounting period in which the credit sale is recognised.

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Definitions:

Type II Error

The error that occurs when the null hypothesis is not rejected when it is actually false, also known as a "false negative".

Sample Size

The number of observations or units chosen from a population for the purpose of statistical analysis.

Lowering Alpha

Reducing the alpha level, or the threshold of significance, to decrease the probability of committing a type I error in hypothesis testing.

Type I Error

A statistical error occurring when a true null hypothesis is incorrectly rejected.