Bad Debts Expense is consideredA) an avoidable cost in doing business on a credit basis.B) an internal control weakness.C) a necessary risk of doing business on a credit basis.D) avoidable unless there is a recession.

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William Jackman · Accepted Answer

Final Answer : C, Explanation :  Bad Debts Expense is considered a necessary risk of doing business on a credit basis because it is an expected loss that companies prepare for when they decide to offer credit to customers. It reflects the reality that not all receivables will be collected.

Bad Debts Expense is considered

A) an avoidable cost in doing business on a credit basis.
B) an internal control weakness.
C) a necessary risk of doing business on a credit basis.
D) avoidable unless there is a recession.

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