Quiz Ch 05 – T/F Recognition of Uncollectible-Account Expense under Allowance Method
Financial Accounting
Thomas, Tietz, and Harrison
12th Edition
Uncollectible-Account Expense is recognized in the same period of sale under the allowance method.
Uncollectible-Account Expense is recognized in the same period of sale under the allowance method.
The balance sheet reports accounts receivable at their net realizable value.
Recognition of revenue should follow the point of earning and not precede it.
In FOB destination shipments, the seller recognizes revenue when the goods depart from their shipping dock.
Step 3 of the revenue recognition model: seller sets the sale price as the expected amount from the customer.
The allowance method requires companies to use a consistent method for estimating the uncollectible-account expense.
Accounts receivable and trade receivables are the two primary types of receivables.
Customers who make large purchases and have good credit and cash flow often receive trade discounts.
Most sales on account follow a standard credit cycle of 30 days.
Accounts receivable, also known as trade receivables, refer to the outstanding payments that a business is owed by its customers for the goods or services provided.