Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Net Accounts Receivable: Allowance for Doubtful Accounts

Financial Accounting

7. Receivables and Investments

Net Accounts Receivable: Allowance for Doubtful Accounts

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Multiple Choice

The cost of estimated accounts receivable that will not be collected is referred to as:

Allowance for Doubtful Accounts

Bad Debt Expense

Accounts Receivable Turnover

Notes Receivable

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Verified step by step guidance

Understand the concept of uncollectible accounts: In financial accounting, businesses often estimate that a portion of their accounts receivable will not be collected due to customers' inability to pay. This is referred to as bad debts.

Learn about the Allowance for Doubtful Accounts: This is a contra-asset account used to estimate and record the portion of accounts receivable that is expected to be uncollectible. It reduces the total accounts receivable on the balance sheet.

Understand Bad Debt Expense: This is the expense recorded on the income statement to reflect the estimated uncollectible accounts receivable for a specific period.

Differentiate between Accounts Receivable Turnover and Notes Receivable: Accounts Receivable Turnover measures how efficiently a company collects its receivables, while Notes Receivable refers to written promises for amounts to be received in the future, often with interest.

Identify the correct term: Based on the definitions above, the cost of estimated accounts receivable that will not be collected is most closely associated with the Allowance for Doubtful Accounts, as it represents the estimated uncollectible portion of accounts receivable.