Answer the following statements true (T) or false (F)

Question

1) The net realizable value of Accounts Receivable is calculated by subtracting Bad Debts Expense from Accounts Receivable.
2) When accounting for uncollectible accounts under IFRS, the allowance method is used to accomplish the matching of bad debt expense to the sales of the period but not to report receivables at net realizable value.
3) To report accounts receivable at the appropriate amount on the balance sheet, a company determines an accurate estimate of uncollectible accounts and recognizes the associated bad debt expense.
4) When using the allowance method to account for uncollectible accounts receivable, companies estimate bad debt expense at the end of the period and then record an adjusting entry.

Answer 1

1) FALSE
2) FALSE - When accounting for uncollectible accounts under IFRS, the allowance method is used to accomplish the matching of bad debt expense to the sales of the period and to report receivables at net realizable value.
3) TRUE
4) TRUE