Which statement is not correct about estimating the allowance for doubtful accounts under the balance sheet approach?

Question

Quizplus · Accepted Answer

The balance sheet approach estimates the allowance for doubtful accounts by basing the bad debt expense on the accounts receivable balance, which is stated at its net realizable value. The net realizable value is the amount of accounts receivable that is expected to be collected after deducting estimated losses from uncollectible accounts. The bad debt expense is often based on an aging of the accounts receivable, which estimates the percentage of accounts receivable that will become uncollectible based on their age. However, accounts receivable are not stated at their fair value under the balance sheet approach.

Which Statement Is Not Correct About Estimating the Allowance for Doubtful