Which of the following is not true?
A)Firms report accounts receivable they expect to collect within one year at the amount of cash the firms expect to receive.
B)Both U.S.GAAP and IFRS require firms with significant uncollectible accounts receivable to estimate the amount of uncollectible accounts related to a particular period's sales and recognize that amount as bad debt expense in the same period as the related revenues.
C)Firms typically use a contra account to accounts receivable, such as Allowance for Uncollectibles, to reflect the amount of accounts receivable they do not expect to collect.
D)The entry to recognize estimated uncollectible amounts involves a debit to Bad Debt Expense and a credit to Allowance for Uncollectibles.
E)The write-off of a particular customer's account that becomes uncollectible involves a debit to Accounts Receivable and a credit to Allowance for Uncollectibles .

Question

Quizplus · Accepted Answer

The correct process for writing off a particular customer's account that becomes uncollectible involves a debit to Allowance for Uncollectibles and a credit to Accounts Receivable, not the other way around. This corrects the account balance without affecting the income statement directly at the time of the write-off.

Which of the Following Is Not True