If a company uses the allowance method of accounting for bad debts,which one of the following statements is true?
A)It will report accounts receivable on the balance sheet at their net realizable value.
B)It will record bad debts only when an account is determined to be uncollectible.
C)It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts.
D)It violates the matching principle.

Question

Quizplus · Accepted Answer

The allowance method involves estimating uncollectible accounts at the end of each period and adjusting the accounts receivable balance to reflect these estimates, thus reporting accounts receivable at their net realizable value on the balance sheet.

If a Company Uses the Allowance Method of Accounting for Bad