One of the shortcomings in evaluating the allowance for uncollectible accounts by reviewing individual noncurrent balances on the aged trial balance is I. it is difficult to compare the results of the current year with those of the previous year.
II) current accounts are ignored in establishing the adequacy of the allowance.
A) I only
B) II only
C) both I and II
D) neither I nor II

Question

Quizplus · Accepted Answer

Both I and II are correct. The aged trial balance only includes noncurrent balances, so it is difficult to compare the results of the current year with those of the previous year. Additionally, current accounts are ignored in establishing the adequacy of the allowance.

One of the Shortcomings in Evaluating the Allowance for Uncollectible