A Common Way to Evaluate the Adequacy of the Bad

Multiple Choice

A common way to evaluate the adequacy of the bad debt allowance is to

A) review the results of tests of controls that are concerned with the client's credit policy.
B) inspect carefully the noncurrent accounts on the aged trial balance to determine which ones have not been paid subsequent to the balance sheet date.
C) examine the program logic that is used to prepare the aged trial balance and to monitor the implementation of credit policies.
D) send positive confirmations to all accounts with balances over 90 days based on the aged trial balance.