Almost every asset and liability account requires significant judgments.Which of the following accounts is subject to allowance for noncollectibility?
A)Inventories
B)Marketable securities
C)Other receivables
D)Deferred revenue

Question

Quizplus · Accepted Answer

Other receivables are subject to allowance for noncollectibility. This account includes amounts owed to the company from customers or other entities for goods or services that are not classified as accounts receivable or notes receivable. The company must make a judgment on whether to provide an allowance for uncollectible amounts based on various factors such as historical collection patterns and the financial strength of the debtor. Inventories, marketable securities, and deferred revenue do not typically require an allowance for noncollectibility.

Almost Every Asset and Liability Account Requires Significant Judgments