If a company fails to record estimated bad debts expense, then
A)net realizable value is understated.
B)expenses are understated.
C)revenues are understated.
D)receivables are understated.

Question

Quizplus · Accepted Answer

If a company fails to record estimated bad debts expense, expenses are understated because the company is not recognizing the cost associated with potential uncollectible accounts.

If a Company Fails to Record Estimated Bad Debts Expense