The test of balances to evaluate the adequacy of the allowance for uncollectible accounts does not involve which of the following?
A) footing and crossfooting the aged trial balance of accounts receivable and agreeing the total to the general ledger balance
B) considering evidence concerning the collectibility of past due amounts
C) testing the aging of the amounts shown in the aging categories on the aged trial balance
D) considering evidence concerning the collectibility of current amounts
E) assessing the reasonableness of the percentages used to compute the allowance component required for each aging category and the adequacy of the overall allowance

Question

Quizplus · Accepted Answer

The test of balances for evaluating the adequacy of the allowance for uncollectible accounts involves assessing past due amounts and the aging of accounts, but not specifically the collectibility of current amounts, as these are typically assumed to be collectible.

The Test of Balances to Evaluate the Adequacy of the Allowance