Bad debts expense is ordinarily tested as part of the testing of the valuation of:
A)cash at bank.
B)trade payables.
C)trade receivables.
D)inventory.

Question

Quizplus · Accepted Answer

Bad debts expense is related to the valuation of trade receivables, as it represents the amount of receivables that the company does not expect to collect. The expense is necessary to ensure that the valuation of trade receivables is presented at the net realizable value. The other options (A), (B), and (D) are not directly related to bad debts expense.

Bad Debts Expense Is Ordinarily Tested as Part of the Testing