Which of the Following Is Not a Significant Difference Between

question 94

Multiple Choice

Which of the following is not a significant difference between the allowance method and the direct write-off method of accounting for uncollectible accounts?

• A)One method requires the estimation of uncollectible accounts and the other does not.
• B)One method conforms to GAAP and the other typically does not.
• C)One method reports net realizable value on the balance sheet and the other does not.
• D)One method requires writing off of uncollectible accounts and the other does not.

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Definitions:

Service Level

A measure of performance that represents the percentage of customer demands that are met without delay.

Lead Time

The timeframe between the initiation and completion of a process, such as from placing an order to its delivery.

Re-Order Point

The inventory level at which an order should be placed to replenish stock before it runs out, based on lead time and consumption rate.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices at a given time.