According to GAAP,the amount of bad debt expense can be estimated by:
A)Only the percent of sales method.
B)Only the percent of accounts receivable method.
C)Only by the aging of accounts receivable method.
D)Only by the percent of sales method or the percent of accounts receivable method.
E)Bad debt expense can be estimated by the percent of sales method,the percent of accounts receivable method,or by the aging of accounts receivable method.

Question

Quizplus · Accepted Answer

GAAP allows for multiple methods to estimate bad debt expense including the percent of sales method, percent of accounts receivable method, and the aging of accounts receivable method. Therefore, the best choice is E, as it includes all three methods.

According to GAAP,the Amount of Bad Debt Expense Can Be