A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the:
A) Percent of accounts receivable method.
B) Percentage of sales method.
C) Aging of investments method.
D) Direct write-off method.
E) Aging of accounts receivable method.

Question

Quizplus · Accepted Answer

The Aging of accounts receivable method involves analyzing outstanding accounts by the length of time past due to estimate the bad debt expense. This method is considered more accurate as it focuses on the actual outstanding accounts and their age.

A Method of Estimating Bad Debts Expense That Involves a Detailed