All of the following are features of the aging of accounts receivable method except
A)focuses on asset valuation.
B)analysis of allowance for doubtful accounts required in order to determine bad debts expense.
C)emphasizes statement of financial position relationship.
D)determines bad debt expense directly.

Question

Quizplus · Accepted Answer

The aging of accounts receivable method is used to estimate the amount of bad debt expense to record in an accounting period. It focuses on the valuation of accounts receivable and emphasizes the relationship between the statement of financial position and income statement. The analysis of allowance for doubtful accounts is required to determine the ending balance of the allowance and the related bad debt expense. Therefore, choice D is not a feature of the aging of accounts receivable method, as it does not determine bad debt expense directly.

All of the Following Are Features of the Aging of Accounts