Question

The three primary accounting problems with accounts receivable are:

(1) recognizing,
(2) depreciating, and
(3) disposing.

a) True
b) False

Answer 1

The statement about problems with accounts receivable is false because accounts receivable issues revolve around recognizing, valuing, and collecting, not depreciating.

Step-by-step explanation:

The statement that the three primary accounting problems with accounts receivable are: (1) recognizing, (2) depreciating, and (3) disposing is false. In accounting, the key issues with accounts receivable are recognizing, valuing or measuring, and collecting, not depreciating. Depreciation is not applied to accounts receivable because this concept relates to tangible fixed assets which lose value over time due to wear and tear or obsolescence. Instead, the valuation of accounts receivable often considers the possibility of some debt being uncollectible and thus takes into account allowances for doubtful accounts.