Taylor uses the balance sheet approach to estimate bad debt expense. How...
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Accounting
Taylor uses the balance sheet approach to estimate bad debt expense.
How could a company with receivables like Taylor be able to manage earnings in applying generally accepted accounting principles?
Select one:
a
In good years Taylor may be conservative and overestimate the allowance account thereby increasing the expense and in bad years underestimate the allowance account increasing earnings
b
GAAP does not allow for earnings management.
c
In good years Taylor may be conservative and overestimate the allowance account thereby decreasing the expense and in bad years underestimate the allowance account decreasing earnings
d
The SEC forbids companies from managing earnings.
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