Final answer:
The shortcomings of evaluating the allowance for uncollectible accounts by reviewing individual noncurrent balances on the aged trial balance include difficulty in comparing results between years and ignoring current accounts in establishing the adequacy of the allowance.
Step-by-step explanation:
The correct answer is C) both I and II.
One of the shortcomings in evaluating the allowance for uncollectible accounts by reviewing individual noncurrent balances on the aged trial balance is that it is difficult to compare the results of the current year with those of the previous year. Since the review is focused on noncurrent balances, the evaluation does not consider the current accounts in establishing the adequacy of the allowance.
For example, if the allowance for uncollectible accounts is determined solely based on the noncurrent balances, the evaluation may not accurately reflect changes in the current accounts. This can lead to an inaccurate assessment of the adequacy of the allowance and may result in potential financial risks for the business.
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