Uncollectible Accounts Expense

question 112

Multiple Choice

Uncollectible accounts expense:

• A)Should not occur if the credit department properly investigates prospective customers who wish to purchase merchandise on credit.
• B)Is the amount of cash a business must pay each time a credit customer fails to pay his or her account.
• C)Is the amount a business must pay to a collection agency to recover amounts on overdue accounts receivable.
• D)Represents the loss in value of accounts receivable that are estimated to be uncollectible.

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Definitions:

Wheat Yields

The quantity of wheat produced per unit of land area.

Total Revenues

The total amount of money generated by a firm from its sales activities before any costs or expenses are subtracted.

Price Elasticity

A measure of how the quantity demanded or supplied of a good changes in response to a change in its price, indicating the sensitivity of consumers or producers to price changes.

Elastic

Describing a situation where the demand or supply for a product responds significantly to changes in price.