Questions
Single choice
A company's Bad Debt Expense provides an indication of the Blank ______.
Options
A.increase in accounts receivable
B.cost of defaulting on its notes payable
C.estimated amount of this period's credit sales that customers will fail to pay
D.amount owed on loans
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Step-by-Step Analysis
The question asks about what the Bad Debt Expense indicates in a company's financials.
Option 1: 'increase in accounts receivable' — Bad debt expense is not a direct measure of AR changes; it relates to uncollectible amounts, not the gross increase in receivables itself. AR can rise for many reasons, including sales growth, but bad de......Login to view full explanationLog in for full answers
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