Lynn Katsopolus Was Not Sure Which Customers of Her Client

question 59

Multiple Choice

Lynn Katsopolus was not sure which customers of her client to send confirmations. Who should she send confirmations to?

• A) to the customers who will be most likely to reply
• B) to the customers with the largest balances
• C) to the customers with the oldest balances
• D) both b and c

---

Definitions:

Bad Debts Expense

An expense reported on the income statement, representing the amount of receivables that a company does not expect to collect due to customer default.

Adjusting Entries

Entries recorded in the journals at the close of an accounting period to assign income and costs to the period they truly relate to.

Allowance Method

A method of accounting for bad debts that involves estimating and setting aside a specific amount to cover potential credit losses.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and are therefore written off as a loss by a business.