Under the allowance method of accounting for uncollectible accounts, Bad Debts Expense is debited
A)when a credit sale is past due.
B)at the end of each accounting period.
C)whenever a pre-determined amount of credit sales have been made.
D)when an account is determined to be uncollectible.

Question

Quizplus · Accepted Answer

Under the allowance method, Bad Debts Expense is estimated and recorded at the end of each accounting period based on the current balance in the Allowance for Doubtful Accounts account. This is done to ensure that the balance sheet accurately reflects the estimated amount of uncollectible accounts. Therefore, choice B is the correct answer as Bad Debts Expense is debited at the end of each accounting period.

Under the Allowance Method of Accounting for Uncollectible Accounts, Bad