The presentation of net accounts receivable on the balance sheet will be most accurate under the
A) direct write-off method.
B) cash basis accounting.
C) estimate based on analysis of receivables.
D) none of these.

Question

Quizplus · Accepted Answer

The estimate based on analysis of receivables is a more accurate method for presenting net accounts receivable on the balance sheet because it considers potential bad debts and provides an allowance for doubtful accounts. The direct write-off method and cash basis accounting do not consider potential bad debts and can therefore overstate the amount of accounts receivable.

The Presentation of Net Accounts Receivable on the Balance Sheet