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Using the allowance method, Bad Debt Expense is recorded _____. a. as an estimate in the period of the related credit sales b. when the company defaults on its Notes Payable c. when the specific customer
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Using the allowance method, Bad Debt Expense is recorded _____.

a. as an estimate in the period of the related credit sales
b. when the company defaults on its Notes Payable
c. when the specific customer is known to be uncollectible
d. when a company writes off its uncollectible receivables

User Sahil Kapoor
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1 Answer

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12 votes

Final answer:

Bad Debt Expense is recorded as an estimate in the period of the related credit sales.

Step-by-step explanation:

The correct answer is a. as an estimate in the period of the related credit sales. The allowance method is used to estimate and record Bad Debt Expense, which represents the amount of accounts receivable that is unlikely to be collected. It is recorded in the same accounting period as the related credit sales, based on an estimate of the percentage of credit sales that will become uncollectible.

User Elfisher
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