Under the Allowance Method of Accounting for Bad Debts, Why

question 148

Multiple Choice

Under the allowance method of accounting for bad debts, why must uncollectible accounts receivable be estimated at the end of the accounting period?

• A)To allow the collection department to schedule work for the next accounting period.
• B)To determine the gross realizable value of accounts receivable.
• C)The IRS rules require the company to make the estimate.
• D)To match bad debt expense to the period in which the revenues were earned.

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Definitions:

Medical Attention

Professional healthcare provided by clinicians or medical personnel often sought in case of injury or illness.

Peak BAC

The highest concentration of alcohol in the bloodstream, referred to as Blood Alcohol Concentration, after consuming alcohol.

BAC Levels

Blood Alcohol Concentration levels, which measure the amount of alcohol in a person's bloodstream.

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A reduction in the ability to make considered decisions or judgments, which can be caused by various factors including substance abuse or mental health disorders.