Proper accounting requires that an account receivable must be written off by the client when:
A) the client company concludes that an amount is no longer collectible.
B) the customer files for bankruptcy.
C) the account is at least six months old.
D) a collection agency cannot inspire customer to pay the debt.

Question

Quizplus · Accepted Answer

An account receivable must be written off by the client when they determine that the amount owed by the customer is no longer collectible. This is typically done after the client has exhausted all efforts to collect the debt, such as sending multiple reminders, using a collection agency, and making phone calls or personal visits. The six-month age of the account or the filing of bankruptcy by the customer are not necessarily factors in determining when to write off an account receivable.

Proper Accounting Requires That an Account Receivable Must Be Written