Under the allowance method, bad Debt price is debited as soon as an account is considered uncollectible and must be written off.

You are watching: Which one of the following is not a principle of sound accounts receivable management?


On January 15, Nifty agency sells merchandise on account to Martinez Associates because that $3,000 with terms 3/10, n/30. On January 20, Martinez return merchandise worth $600 come Nifty. ~ above January 24, payment is got from Martinez because that the balance due. What is the lot of cash received?
Allowance for cynical Accounts is a contra account that is deducted from accounts Receivable ~ above the balance sheet.
Aging the accounts receivable: analysis of client account balances by length of time they have actually been unpaid.Direct write-off method: negative debt losses are not estimated and also no allowance account is used.Trade receivables: Notes and also accounts receivable that an outcome from sales transactions.Accounts receivable turnover: A measure of the liquidity of receivables.Percentage the receivables basis: Emphasizes expected cash realizable value of accounts receivable.Promissory note: A composed promise to pay a mentioned amount on need or in ~ a definite time.Dishonored note: A note which is not paid in complete at maturity.Cash net realizable value: The network amount intended to be obtained in cash.Credit card sales: Emphasizes intended cash realizable value of account receivable.
If a firm has significant concentrations of credit risk, it must comment on this danger in the notes to its financial statements.
The bookkeeper videotaped the adhering to journal entryAllowance for skeptical Accounts 1,000Accounts unification - Richard James 1,000Which one of the adhering to statements is false?
An aging of accounts receivable schedule is based upon the premise the the much longer the duration an account stays unpaid, the better the probability that it will at some point be collected.

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An aging of accounts receivable schedule is based on the premise that the much longer the duration an account continues to be unpaid, the greater the probability the it will eventually be collected.
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Fundamental Financial bookkeeping Concepts9th EditionChristopher Edmonds, Frances M McNair, Philip R. Olds, cutting board P. Edmonds
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