the balance in allowance for doubtful accounts is important to the calculation of bad debt when bad debt is calculated a. as a % of credit sales b. as a % of accounts receivable that will not be collected c. using direct write-off method d. none of the above please explain. i am confused by the wording of this question.
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the balance in allowance for doubtful accounts is important to the calculation of bad debt when bad debt is calculated a. as a % of credit sales b. as a % of accounts receivable that will not be collected c. using direct write-off method d. none of the above please explain. i am confused by the wording of this question.
answer :
Adding an allowance for doubtful accounts to a company’s balance sheet is particularly important because it allows a company’s management to get a more accurate picture of its total assets. Eventually, if the money remains unpaid, it will become classified as “bad debt”