Which of the Following Statements About Methods of Accounting for Bad

question 7

Multiple Choice

Which of the following statements about methods of accounting for bad debts is correct?

• A)When the allowance method is used,the journal entry to write-off an uncollectible account does not change the amount reported as Accounts Receivable,Net on the balance sheet.
• B)The two methods of accounting for bad debts that are acceptable under GAAP are the allowance method and the direct write-off method.
• C)When the allowance method is used,Bad Debt Expense is equal to the write-offs that occurred during the period.
• D)When the allowance method is used,if actual results differ from the estimates,the prior year financial statements must be corrected.

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