The aging of the accounts receivable approach to estimating uncollectible accounts does not:
A)Take into consideration the existing balance in the Allowance for Doubtful Accounts.
B)Utilize a percentage of probable uncollectible accounts for each age group of accounts receivable.
C)Stress the relationship between uncollectible accounts expense and net sales.
D)Tend to give a reliable estimate of uncollectible accounts because of the consideration given to the collectability of specific accounts receivable.

Question

Quizplus · Accepted Answer

The aging of the accounts receivable approach does take into consideration the balance in the Allowance for Doubtful Accounts (A), utilizes a percentage of probable uncollectible accounts for each age group (B), and tends to give a reliable estimate of uncollectible accounts (D). However, it does not stress the relationship between uncollectible accounts expense and net sales (C).

The Aging of the Accounts Receivable Approach to Estimating Uncollectible