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From 1998 until the third quarter of fiscal 2000, WorldCom, Inc. did not prepare off numerous accounts of customers who were in default and unlikely to pay their bills. In the third quarter of 2000, WorldCom management, who had earlier refused to approve any prepare-offs, told the accounting area to prepare off $405 million of accounts receivable. Wall Street analysts viewed this prepare-off as a one-time nonrecurring event. describe the significance of this transaction to an analyst.

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Accounting Basics, Accounting

Category:- Accounting Basics
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