A Large Computer Manufacturer Forbids Its Executives and Managers from Serving

question 66

Multiple Choice

A large computer manufacturer forbids its executives and managers from serving as directors or officers for Intel Corporation or any other corporations from which it might purchase component parts. The company is trying to prevent

• A)their employees from having other jobs.
• B)a conflict of interest.
• C)trade secrets from being revealed.
• D)losing its executives to other organizations.
• E)fairness and honesty.

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Definitions:

Gross Receivables

The total amount of money owed to a company by its customers before deducting any allowance for doubtful accounts.

Bad Debt Expense

An expense reported on a company's income statement, representing the estimated amount of accounts receivable that will not be collected.

Sales Returns

Goods returned to the seller by the customer post-purchase due to defects or dissatisfaction, affecting the seller's revenue.

Estimated Uncollectibles

Estimated uncollectibles are a provision for debts that are not expected to be collected due to customers being unable or unwilling to pay.