If a company is experiencing more write offs than were estimated,
A) the bad debt should be reduced next period.
B) the direct method should be implemented.
C) the percentage should be increased next accounting period.
D) an adjustment should be made retrospectively.

Question

Quizplus · Accepted Answer

If a company experiences more write-offs than estimated, it indicates that the allowance for doubtful accounts was underestimated. Therefore, the percentage used to estimate bad debts should be increased in the next accounting period to better align with actual write-offs.

If a Company Is Experiencing More Write Offs Than Were