The Method of Estimating Uncollectible Accounts Based on the Length

question 30

Multiple Choice

The method of estimating uncollectible accounts based on the length of time the amount is owed by the customer is referred to as the:

• A)Activity method.
• B)Realization method.
• C)Direct write-off method.
• D)Aging method.

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Definitions:

Hourly Rates

The amount charged or paid for each hour of labor or service.

Labor Efficiency Variance

The difference between the expected amount of labor hours to complete a task and the actual hours used, indicating efficiency in labor use.

Standard Labor Rate

A predetermined rate used to allocate labor costs to products or services, based on the expected or average wage rate for labor.

Employment Taxes

Taxes that employers are required to pay on behalf of their employees, such as social security and Medicare taxes.