In determining the adequacy of the allowance for uncollectible accounts, the least reliance should be placed upon which of the following?
A)The credit manager's opinion.
B)An aging schedule of past due accounts.
C)Subsequent year collections of amounts in accounts receivable at the balance sheet date.
D)Ratios calculated showing the past relationship of the valuation allowance to net credit sales.

Question

Quizplus · Accepted Answer

The credit manager's opinion is the least reliable method for determining the adequacy of the allowance for uncollectible accounts because it is subjective and may not be based on systematic analysis or historical data, unlike the other options which involve more objective and quantifiable methods.

In Determining the Adequacy of the Allowance for Uncollectible Accounts