Question

When using the allowance method for uncollectible accounts the aging method is called the

Answer 1

Balance Sheet approach-answer Method of estimating uncollectible accounts that focuses on accounts receivable; the accountant calculates the end-of-the-period allowance balance needed according to the aging of the receivable accounts. Also called the balance-sheet approach. The Aging of A/R method: - Also called the balance sheet approach because the allowance is estimated before the adjusting entry for bad debt expense is prepared - Since the aging method is called the balance sheet approach, bad debt expense is determined from the aging schedule of A/R