Which of the Following Statements About the Allowance for Doubtful

question 60

Multiple Choice

Which of the following statements about the allowance for doubtful debts account is true?

• A) The allowance for doubtful debts account represents cash available to meet losses incurred when customers are unable to pay their accounts.
• B) The allowance for doubtful debts account functions to adjust the net value of accounts receivable down to the lower of cost and current estimated collectable amount.
• C) The allowance for doubtful debts account represents the total of accounts considered uncollectable for the current period.
• D) None of the above.

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