Estimating uncollectible accounts by analyzing receivables from specific customers according to how long each has been outstanding is known as the:
A)direct write-off method.
B)percent-of-sales method.
C)allowance method.
D)aging-of-receivables method.

Question

Quizplus · Accepted Answer

The aging-of-receivables method involves analyzing receivables based on how long they have been outstanding, which helps estimate uncollectible accounts. Therefore, option D is the correct choice. The direct write-off method involves writing off specific uncollectible accounts only when they are deemed uncollectible and is not based on analyzing receivables. The percent-of-sales method estimates uncollectible accounts based on a percentage of sales, rather than analyzing receivables. The allowance method estimates uncollectible accounts based on past experiences and trends and may not necessarily involve analyzing receivables based on their age.

Estimating Uncollectible Accounts by Analyzing Receivables from Specific Customers According