pur poses b. Estimates are used. c. Determining worthless accounts under direct

Question

pur poses b. Estimates are used. c. Determining worthless accounts under direct write-off method is difficult to do. d. Improved matching of bad debt expense with revenue. Which of the following concepts relates to using the allowance method in accounting for accounts receivable? 31. a. Bad debt expense is an estimate that is based on historical and prospective information. b. Bad debt expense is based on the actual amounts determined to be uncollectible c. Bad debt expense is an estimate that is based only on an analysis of the receivables d. Bad debt expense is management's determination of which accounts will be sent to aging the attorney for collection.

Explanation / Answer

Option : A

Bad debt expense is an estimate that is based on historical and prospective information.

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