The Allowance for Doubtful Accounts Will Not Be Precise by Either

question 35

Multiple Choice

The allowance for doubtful accounts will not be precise by either the client or the auditor because of which of the following reasons?

• A) It is an accounting estimate based upon judgment.
• B) GAAP is not clear on the calculation of the allowance.
• C) It is merely a reserve that is reversed by the client as income is needed for profitable results.
• D) The precision is determined by the results of confirmation responses.

---

Definitions:

Aligned

The state of being in agreement or conforming to predetermined specifications, standards, or objectives.

Tool Development

The process of creating, designing, and refining tools or software to facilitate tasks or solve specific problems.

Project Participants

Individuals or groups who have a stake in the success and outcomes of a project.

Project Story

A narrative that outlines the journey of a project, including its challenges, milestones, solutions, and achievements.