The Challenge Businesses Face When Estimating the Allowance for Previously

Multiple Choice

The challenge businesses face when estimating the allowance for previously recorded sales is that:

A) at the time of the sale, it is not known which particular customer will be a "bad" customer
B) past default rates are not a good predictor of future default rates
C) in bad economic times, fewer customers will have problems with their payments
D) those sales have been closed into retained earnings