If a company uses the allowance method of accounting for bad debts, which one of the following statements is true?
A) It will report accounts receivable in the balance sheet at their net realizable value
B) It will record bad debts only when an account is determined to be uncollectible.
C) It will reduce the accounts receivable at the end of the accounting period for estimated uncollectible accounts.
D) It violates the matching principle.

Question

Quizplus · Accepted Answer

The allowance method reports accounts receivable at net realizable value by estimating uncollectible accounts and recording them in an allowance account.

If a Company Uses the Allowance Method of Accounting for Bad