Multiple Choice
Which of the following best describes how the direct write-off method affects net accounts receivable on the balance sheet?
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7. Receivables and Investments
Net Accounts Receivable: Direct Write-off Method
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In the context of financial accounting, the total amount still owed on a house is referred to as which of the following?
A
Mortgage Payable
B
Allowance for Doubtful Accounts
C
Accumulated Depreciation
D
Net Accounts Receivable
Verified step by step guidance1
Understand the context of the question: The problem is asking about the term used in financial accounting to describe the total amount still owed on a house.
Review the provided options: Mortgage Payable, Allowance for Doubtful Accounts, Accumulated Depreciation, and Net Accounts Receivable.
Analyze each term: Mortgage Payable refers to the liability for the remaining balance on a loan secured by a house. Allowance for Doubtful Accounts is a contra-asset account used to estimate uncollectible receivables. Accumulated Depreciation represents the total depreciation expense recorded for an asset over time. Net Accounts Receivable is the amount of receivables expected to be collected after accounting for doubtful accounts.
Determine the correct term: Since the question is about the total amount owed on a house, the term Mortgage Payable is the most relevant, as it directly refers to the liability associated with a mortgage loan.
Conclude the reasoning: The correct answer is Mortgage Payable because it aligns with the definition of the total amount still owed on a house in financial accounting.
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