The Allowance for Uncollectible Accounts Is Necessary Because

question 56

Multiple Choice

The allowance for uncollectible accounts is necessary because

• A)a liability results when a credit sale is made.
• B)when recording uncollectible accounts expense,it is not possible to predict specifically which accounts will not be collected.
• C)management should know how many credit losses have been sustained over the years.
• D)uncollected accounts that are written off must be accumulated in a separate account.

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Definitions:

Full Warranty

A comprehensive guarantee that covers the repair or replacement of defective products or parts with minimal conditions for a specified period.

Limited Warranty

A warranty with specific conditions and limitations on what is covered, the duration of coverage, and what will be done to correct issues.

Implied Warranty

A legal assurance inherent in a transaction that the goods or services sold meet certain quality standards, even if not explicitly stated.

Express Warranty

An express warranty is a seller's promise or guarantee that a product will meet a specified level of quality and reliability.