Why Are Estimates of Bad Debts Used to Record Uncollectible

question 134

Multiple Choice

Why are estimates of bad debts used to record uncollectible amounts of accounts receivable?

• A)Doing so avoids violating the expense recognition ("matching")principle.
• B)It is an easier method than waiting for accounts to actually become uncollectible.
• C)Because the actual amount of uncollectible accounts can never be known.
• D)It is the most conservative approach.

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