An accounting procedure that (1)estimates and reports bad debt expense from creditsales during the period of the sales and (2)reports accounts receivable at the amount of cash inflow that is expected from their collection is the:

Question

Quizplus · Accepted Answer

The description given matches the characteristics of the allowance method of accounting for bad debts, which estimates and reports bad debt expense based on past experience and current economic conditions, and also reports accounts receivable at their net realizable value (expected cash inflow from collection). The other options either do not involve estimating bad debt expense or do not report accounts receivable at their expected cash inflow.

An Accounting Procedure That (1)estimates and Reports Bad Debt Expense