The aging-of-receivables method of estimating uncollectible accounts is:
A)not an acceptable method of estimating bad debts.
B)a balance sheet approach,since it focuses on accounts receivable.
C)an income statement approach,since it focuses on the amount of expense to be reported on the income statement.
D)is required to be used by all companies because it focuses on what should be the most relevant and faithful representation of accounts receivable on the balance sheet.

Question

Quizplus · Accepted Answer

The aging-of-receivables method focuses on the balance sheet by estimating the amount of uncollectible accounts that will need to be written off from the accounts receivable balance. This method is commonly used by companies to determine the amount of allowance for doubtful accounts to report on the balance sheet.

The Aging-Of-Receivables Method of Estimating Uncollectible Accounts Is