Select correct answer The expected credit loss model requires what?a) Past due status onlyb) Actual defaults onlyc) Forward-looking informationd) Management estimates only

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Answered: The expected credit loss model requires…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 9MC: Which method delays recognition of bad debt until the specific customer accounts receivable is...

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Similar questions

Explain CECL (“Current Expected Credit Loss”) model.
Which method delays recognition of bad debt until the specific customer accounts receivable is identified? A. income statement method B. balance sheet method C. direct write-off method D. allowance method
Which account type is used to record bad debt estimation and is a contra account to Accounts Receivable?
Which one of the following elements of credit risk does not comprise Standalone Risk Default probability Loss given default Default correlation Migration risk
Which of the following statements is most correct? * An aging schedule is used to determine what portion of customers pay cash and what portion buy on credit. If a firm changes its credit terms from 1/20, net 40 days, to 2/10, net 60 days, the impact on sales can't be determined because the increase in the discount is offset by the longer net terms, which tends to reduce sales. Aging schedules can be constructed from the summary data provided in the firm's financial statements If a firm's volume of credit sales declines then its DSO will also decline. The DSO of a firm with seasonal sales can vary. While the sales per day figure is usually based on the total annual sales, the accounts receivable balance will be high or low depending on the season.
Using the following key, identify the effects of the following transactions or conditions on the various financial statement elements: I = increases; D = decreases; NE = no effect. A.credit sale b. Collection of a portion of accounts receivable c. Estimate of bad debts d. Write-off of a specific uncollectible account
Which of the following methods may not be appropiate for estimating bad debt expense? a. percentage of net credit sales b. percentage of outstanding accounts receivable c. aging of accounts receivable d. percentage of sales
Which of the following methods may not be appropiate for estimating bad debt expense? a. Percentage of net credit sales b. Percentage of outstanding accounts receivables c. Aging of accounts receivables d. Percentage of sales
Which of the following estimation methods considers the amount of time past due when computing bad debt? A. balance sheet method B. direct write-off method C. income statement method D. balance sheet aging of receivables method
5) Systemic risk is a) credit risk. b) an insurance contract against the default of one or more borrowers. c) firm-specific risk. d) default risk. e) the potential breakdown of the financial system when problems in one market spill over and disrupt others.
Which of the following best describes the objective of estimating bad debt expense with the percentage of credit sales method? a.To estimate the amount of bad debt expense based on an aging of accounts receivable. b.To estimate bad debt expense based on a percentage of credit sales made during the period. c.To determine the amount of uncollectible accounts during a given period. d.To facilitate the use of the direct write-off method.
What would be incorrect about reporting accounts receivable in the balance sheet? Presenting accounts receivable net of allowance for doubtful accounts. Presenting accounts receivable at estimated net realizable value. Presenting accounts receivable at gross amount, less allowance for doubtful accounts. Presenting accounts receivable in the current asset section. Presenting accounts receivable less bad debt expense and write-offs.

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The expected credit loss model requires what? a) Past due status only b) Actual defaults only c) Forward-looking information d) Management estimates only