Necessity of allowance for doubtful accounts


The Allowance for Doubtful Accounts is necessary because:

a. when recording uncollectible accounts expense, it is not possible to know which specific accounts will not pay.

b. uncollectible accounts that are written off must be accumulated in a separate account.

c. a liability results when a credit sale is made.

d. management needs to accumulate all the credit losses over the years.

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Accounting Basics: Necessity of allowance for doubtful accounts
Reference No:- TGS091392

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