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

Question

Quizplus · Accepted Answer

Failing to record estimated bad debts expense results in expenses being understated because the company is not recognizing the cost associated with potential uncollectible accounts.

If a Company Fails to Record Estimated Bad Debts Expense