Under the allowance method of accounting for bad debts, why must uncollectible accounts receivable be estimated at the end of the accounting period?
A)To allow the collection department to schedule work for the next accounting period.
B)To determine the gross realizable value of accounts receivable.
C)The IRS rules require the company to make the estimate.
D)To match bad debt expense to the period in which the revenues were earned.

Question

Quizplus · Accepted Answer

The allowance method estimates uncollectible accounts to match bad debt expense with the revenues they helped generate, adhering to the matching principle in accounting.

Under the Allowance Method of Accounting for Bad Debts, Why