Using the balance sheet approach,the balance in Allowance for Doubtful Accounts is not taken into consideration when finding the adjustment.

Question

Quizplus · Accepted Answer

The balance sheet approach does take into consideration the balance in Allowance for Doubtful Accounts when finding the adjustment. The adjustment is made to reflect the estimated amount of bad debts that are expected based on the current outstanding accounts receivable and the current balance in the allowance account.

Using the Balance Sheet Approach,the Balance in Allowance for Doubtful