A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:
A) Direct write-off method.
B) Aging of accounts receivable method.
C) Timing method.
D) Aging of investments method.
E) Percent of accounts receivable method.

Question

Quizplus · Accepted Answer

The aging of accounts receivable method involves analyzing the outstanding accounts and their length of time past due, which allows for a more accurate estimation of bad debts expense. The other options do not involve such a detailed examination and may result in less accurate estimates.

A Method of Estimating Bad Debts Expense That Involves a Detailed