If a Company Uses the Allowance Method of Accounting for Bad

question 5

Multiple Choice

If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?

• A)It violates the matching principle.
• B)It will record bad debts only when an account is determined to be uncollectible.
• C)It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts.
• D)It will report accounts receivable in the balance sheet at their net realizable value.