Todd Develops a Plan for Obtaining and Using the Money

question 83

Multiple Choice

Todd develops a plan for obtaining and using the money necessary for his company to implement its goals. This is called a(n)

• A) credit policy.
• B) capital budget.
• C) operational plan.
• D) financing agreement.
• E) financial plan.

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Definitions:

Uncollectible

Refers to debts that have been deemed uncollectible from debtors, often written off as a loss by the business.

Income Statement Approach

A method for preparing the bad debt expense by estimating the amount of accounts receivable that will not be collected and adjusting the allowance for doubtful accounts accordingly.

Bad Debts Expense

The cost associated with accounts receivable that a company does not expect to collect due to customer default.

Receivables

Receivables, often called accounts receivable, are the funds owed to a company by clients or customers for goods or services already delivered or used but not yet paid for.