Balance sheet approach to estimate bad debt expense

Reference no: EM13153246

If a company uses the balance sheet approach to estimate bad debt expense, bad debt expense for a period can be determined by:

A. Multiplying net credit sales by the bad debt experience ratio.

B. Adding the beginning balance in the allowance for uncollectible accounts to the provision for uncollectible accounts and deducting the desired ending balance in the allowance for uncollectible accounts.

C. Multiplying ending accounts receivable in each age category by the expected loss ratio for each age category.

D. Taking the difference between the unadjusted balance in the allowance account and the desired balance.

Reference no: EM13153246

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