Ratios used to evaluate the allowance for uncollectibles are
A)Bad Debt Expense to Sales Revenue and the ratio of the Accounts Receivable, Gross to Allowance for Uncollectibles to Accounts.
B)Sales Revenue to Bad Debt Expense and the ratio of the Accounts Receivable, Gross to Allowance for Uncollectibles to Accounts.
C)Sales Revenue to Bad Debt Expense and the ratio of the Allowance for Uncollectibles to Accounts Receivable, Gross.
D)Bad Debt Expense to Sales Revenue and the ratio of the Allowance for Uncollectibles to Accounts Receivable, Gross.
E)none of the above.

Question

Quizplus · Accepted Answer

The most commonly used ratios to evaluate the allowance for uncollectibles are Bad Debt Expense to Sales Revenue and the ratio of the Allowance for Uncollectibles to Accounts Receivable, Gross. Therefore, option D is the best choice. Option A is incorrect because it has the wrong order of ratios. Option B is incorrect because it uses Sales Revenue as the numerator instead of Bad Debt Expense. Option C uses the wrong order of figures in the ratio.

Ratios Used to Evaluate the Allowance for Uncollectibles Are