If a Company Uses the Allowance Method of Accounting for Bad

question 74

Multiple Choice

If a company uses the allowance method of accounting for bad debts:

• A) it uses a liability account called the Allowance for Bad Debts account.
• B) it will record bad debts only when an account is determined to be uncollected.
• C) it does not have to reduce accounts receivable when the account is written off.
• D) it will report accounts receivable in the balance sheet at their net realizable value.

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