A Disadvantage of Basing Bad Debt Expense on the Historical

question 83

Multiple Choice

A disadvantage of basing bad debt expense on the historical relationship between actual bad debts and the outstanding accounts receivable balance at the end of the year is that

• A)it may not appropriately match current expenses against current revenues
• B)it provides a reasonable estimate of the accounts receivable net realizable value
• C)it is not a generally accepted accounting procedure
• D)it is an income statement approach

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