Zackie Company has recently allowed its customers to make purchases on credit. The terms are 2/10, n/30. Unfortunately, Zackie Company has found that not all of its credit customers pay their bills on time. Accordingly, Zackie Company has estimated an allowance for uncollectible accounts and matched this bad debt expense against credit sales. On Zackie Company’s financial statements, the allowance for uncollectible accounts is classified as a current liability.

1. State two accounting issues in this case.

2. Provide ASC Guidance for each issue along with a recommendation for each.

Answer rating: 100% (QA)

Accounting Issues and ASC Guidance for Zackie Company 1 Accounting Issues a Measurement of Bad Debt Expense Matching the estimated allowance for uncol... View the full answer