NACVA CVA Exam - Topic 5 Question 79 Discussion

Actual exam question for NACVA's CVA exam

Question #: 79
Topic #: 5

One way is to compare the historical percentage of bad debt losses from past credit sales with the percentage current credit sales being charged to bad debt expense to see if too little or too much is currently being charged. Another approach is:

ATo compare the unearned revenue schedule allowance relative to the amount of overdue accounts

BTo compare the aged account receivable schedule allowance relative to the amount of overdue accounts

CTo compare the aged account receivable schedule allowance relative to the amount of expired accounts

DTo compare the aged account receivable schedule allowance relative to the amount of undue accounts

Show Suggested Answer

Suggested Answer: D

by Margart at Jan 28, 2024, 07:58 AM

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Madonna

5 months ago

B is definitely the most relevant here.

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Page

5 months ago

I thought expired accounts were a thing of the past!

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Marylin

5 months ago

Wait, what are "undue accounts"?

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Roxane

6 months ago

I disagree, A could work too.

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Stefany

6 months ago

Option B seems like the best choice!

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Fabiola

6 months ago

I definitely remember that the aged accounts receivable schedule is important, but I’m not clear on whether it should be compared to overdue or undue accounts.

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Selma

6 months ago

I’m a bit confused about the terms used in the options. I thought "expired accounts" was a term we discussed, but I can't recall if it relates to bad debt.

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Arleen

6 months ago

I remember practicing a similar question where we looked at overdue accounts, so I feel like option B could be the right choice here.

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Portia

7 months ago

I think the correct approach might be to compare the aged account receivable schedule allowance, but I'm not sure if it's specifically about overdue accounts or something else.

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Oren

7 months ago

I agree, option B seems like the best approach here. I'm going to make sure I fully understand the aged accounts receivable schedule before answering.

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Marva

7 months ago

Yeah, that makes sense to me. The key is to look at the relationship between the allowance and the actual overdue balances, not just the overall credit sales.

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Magdalene

7 months ago

I'm leaning towards option B - comparing the aged accounts receivable schedule allowance to the amount of overdue accounts. That seems like the most direct way to assess if the allowance is appropriate.

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Paris

7 months ago

Okay, let's think this through step-by-step. The question is asking about different approaches to evaluating the adequacy of the bad debt allowance.

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Ligia

7 months ago

This question seems straightforward, but I want to make sure I understand the key concepts before answering.

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Penney

7 months ago

Hmm, I'm a little unsure here. I know Avaya wants us to clearly state the problem and provide detailed findings, but I'm not sure what the next step in their diagnostic methodology is. I'll have to think this through carefully.

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Gilberto

7 months ago

This question seems pretty straightforward. I'd focus on option B - conducting audience research. That seems like the key step in developing an effective communication campaign.

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Lashaunda

7 months ago

I'm pretty confident the answer is C. The Cloud Router needs to be in the Host Project to route traffic between the different service projects.

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Frederick

11 months ago

Option B is the answer, no doubt. Comparing the allowance to overdue accounts is the way to go - it's like comparing apples to apples, you know?

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Deeanna

11 months ago

B is the way to go. Comparing the allowance to overdue accounts is a smart move - that's where the real risk lies.

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Eliseo

10 months ago

User 4: It's important to stay on top of overdue accounts to manage bad debt effectively.

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Alyssa

10 months ago

User 3: I think B is the best approach for sure.

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Sommer

11 months ago

User 2: Definitely, it helps to assess the risk accurately.

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Ollie

11 months ago

User 1: I agree, comparing the allowance to overdue accounts is crucial.

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Hassie

12 months ago

I'm going with B as well. Comparing the allowance to overdue accounts makes the most sense in terms of assessing the bad debt provision.

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Arlette

12 months ago

B sounds like the best option to me. Comparing the allowance to the overdue accounts is a practical way to evaluate if the allowance is sufficient.

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Annita

10 months ago

User 3: I agree, comparing the aged account receivable schedule allowance to the amount of overdue accounts is a good indicator of the sufficiency of the allowance.

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Marylin

10 months ago

User 2: Yeah, that seems like a logical way to assess if the allowance is adequate.

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Lenna

11 months ago

User 1: I think B is the best option too. It makes sense to compare the allowance to the overdue accounts.

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Aretha

1 year ago

But wouldn't comparing the aged account receivable schedule allowance give us a better indication of potential bad debt losses?

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Ozell

1 year ago

I disagree, I believe the answer is A) To compare the unearned revenue schedule allowance relative to the amount of overdue accounts.

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Aretha

1 year ago

I think the answer is B) To compare the aged account receivable schedule allowance relative to the amount of overdue accounts.

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Mari

1 year ago

I think the correct answer is B. Comparing the aged account receivable schedule allowance to the amount of overdue accounts is a good way to assess the adequacy of the allowance.

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