When does an account become uncollectible?
A) when accounts receivable is converted into notes receivable
B) when discount is availed on notes receivable
C) there is no general rule for when an account becomes uncollectible
D) at the end of the fiscal year

Question

Quizplus · Accepted Answer

There is no general rule for when an account becomes uncollectible, as it depends on various factors such as payment history, creditworthiness of the debtor, economic conditions, and collection efforts. Therefore, it cannot be determined by converting accounts receivable into notes receivable or availing discounts on them, nor does it happen at the end of the fiscal year. It requires a case-by-case analysis by the company's management or accounting department to determine when an account should be written off as uncollectible.

When Does an Account Become Uncollectible