Under the allowance method of accounting for bad debts, why must uncollectible a

ID: 2379393 • Letter: U

Question

Under the allowance method of accounting for bad debts, why must uncollectible accounts receivable be estimated at the end of the accounting period?

Answer

a-To allow the collection department to schedule work for the next accounting period.

To determine the gross realizable value of accounts receivable.

c- The IRS rules require the company to make the estimate.

To match bad debt expense to the period in which the revenues were earned.

a-To allow the collection department to schedule work for the next accounting period.

To determine the gross realizable value of accounts receivable.

c- The IRS rules require the company to make the estimate.

To match bad debt expense to the period in which the revenues were earned.

Option B is the correct choice.

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