When Accounting for Uncollectible Accounts

question 63

Multiple Choice

When accounting for uncollectible accounts,

• A)if the percentage of sales method is in use, any existing balance in the Allowance for Doubtful Accounts is the amount used in the adjusting entry
• B)in current accounting practice, the most frequently used method of recognizing bad debts is the direct write-off method
• C)writing off a specific receivable does not reduce the current ratio if the percentage of ending accounts receivable method is in use
• D)an aging analysis results in reporting accounts receivable at their historical cost on the balance sheet

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