Which of the following business functions is mainly related to the allowance for doubtful debts?
A) writing off uncollectible accounts receivable
B) granting credit
C) billing customers
D) all of the above

Question

Quizplus · Accepted Answer

The allowance for doubtful debts is a provision made by the business to account for the possibility that some customers will not pay their debts. Writing off uncollectible accounts receivable is the main business function related to the allowance for doubtful debts, as it involves determining which debts are uncollectible and removing them from the accounts receivable balance. Granting credit and billing customers are also important functions related to managing accounts receivable, but they are not directly related to the allowance for doubtful debts.

Which of the Following Business Functions Is Mainly Related to the Allowance