Ken's Candy has been selling to Art's Quik Mart for thirty years.Lately Art's has been paying its bills increasingly slowly.Right now,Ken's Candy has $10,000 in accounts receivable on its books from Art's Quik Mart for candy sold to Art's over the last six months.Art's Quik Mart says it will pay the bill as soon as it can.Ken's Candy is trying to decide whether it should increase its allowance for uncollectible accounts to cover the amount owed by Art's.If Ken's Candy does not increase the allowance,this accounting choice would be considered ________.

Question

Quizplus · Accepted Answer

If Ken's Candy does not increase its allowance for uncollectible accounts, it is taking an aggressive accounting stance. This means that the company is not preparing for the possibility that it may not be able to collect the entire amount owed by Art's Quik Mart, which could lead to a potential financial loss for Ken's Candy in the future. By not increasing the allowance, Ken's Candy is recognizing the full amount of the accounts receivable owed by Art's as revenue, which could inflate its financial statements.

Ken's Candy Has Been Selling to Art's Quik Mart for Thirty