When using the allowance method for accounting for bad debts,trade receivables is reported on the statement of financial position at the expected net realizable value.When a particular receivable from a customer ultimately is determined to be uncollectible,the recording of this event will do which of the following?
A)decrease the net realizable value of the trade receivables.
B)have an effect that is not determinable from the information given.
C)increase the net realizable value of the trade receivables.
D)have no effect on the net realizable value of the trade receivables.

Question

Quizplus · Accepted Answer

When a specific receivable is written off as uncollectible under the allowance method, both the accounts receivable and the allowance for doubtful accounts are reduced by the same amount, leaving the net realizable value unchanged.

When Using the Allowance Method for Accounting for Bad Debts,trade