The practice of reporting the net realizable value of receivables in the financial statements is commonly called the:
A) cash flow method of accounting for uncollectible accounts.
B) allowance method of accounting for uncollectible accounts.
C) direct write-off method of accounting for uncollectible accounts.
D) accrual method of accounting for uncollectible accounts.

Question

Quizplus · Accepted Answer

The allowance method dictates that a company report its receivables net of estimated uncollectible accounts.

The Practice of Reporting the Net Realizable Value of Receivables