Which statement about using the aging of accounts receivable to estimate bad debt expense is correct?

Question

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The aging of accounts receivable method focuses on the balance sheet because it estimates the amount of uncollectible accounts based on the age of specific customer balances, which affects the balance in the allowance for doubtful accounts account. Choice A is incorrect because the percentage of credit sales method estimates bad debt expense based on sales, and Choice B is incorrect because the adjustment to the allowance account is based on the balance in that account prior to the adjustment. Choice C is also incorrect because the aging of accounts receivable method is used to estimate the balance sheet account, allowance for doubtful accounts, and not the income statement.

Which Statement About Using the Aging of Accounts Receivable to Estimate