Which of the following is a method of accounting for uncollectible accounts?
A) reserve method
B) allowance method
C) allocation method
D) accounts receivable method

Question

Quizplus · Accepted Answer

The allowance method is the method of accounting for uncollectible accounts, whereby a company estimates the amount of uncollectible accounts and creates a contra asset account, Allowance for Doubtful Accounts, to reduce the carrying amount of accounts receivable on the balance sheet. This method is required by Generally Accepted Accounting Principles (GAAP).

Which of the Following Is a Method of Accounting for Uncollectible