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NACVA CVA Exam - Topic 5 Question 79 Discussion

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:
D) To compare the aged account receivable schedule allowance relative to the amount of undue accounts
A) To compare the unearned revenue schedule allowance relative to the amount of overdue accounts
B) To compare the aged account receivable schedule allowance relative to the amount of overdue accounts
C) To compare the aged account receivable schedule allowance relative to the amount of expired accounts

NACVA CVA Exam - Topic 5 Question 79 Discussion

Actual exam question for NACVA's CVA exam
Question #: 79
Topic #: 5
[All CVA Questions]

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:

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Suggested Answer: D

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

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Madonna
9 months ago
B is definitely the most relevant here.
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Page
10 months ago
I thought expired accounts were a thing of the past!
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Marylin
10 months ago
Wait, what are "undue accounts"?
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Roxane
10 months ago
I disagree, A could work too.
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Stefany
10 months ago
Option B seems like the best choice!
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Fabiola
11 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
11 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
11 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
11 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
11 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
11 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
11 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
11 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
11 months ago
This question seems straightforward, but I want to make sure I understand the key concepts before answering.
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Penney
11 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
11 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
12 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
1 year 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
1 year 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
1 year ago
User 4: It's important to stay on top of overdue accounts to manage bad debt effectively.
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Alyssa
1 year ago
User 3: I think B is the best approach for sure.
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Sommer
1 year ago
User 2: Definitely, it helps to assess the risk accurately.
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Ollie
1 year ago
User 1: I agree, comparing the allowance to overdue accounts is crucial.
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Hassie
1 year 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
1 year 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
1 year 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
1 year ago
User 2: Yeah, that seems like a logical way to assess if the allowance is adequate.
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Lenna
1 year 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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Jamey
1 year ago
So, B is the correct answer for sure.
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Fletcher
1 year ago
Definitely, it's important to have a realistic estimate of bad debt losses.
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Carole
1 year ago
I think it helps in determining if the allowance is sufficient to cover potential bad debts.
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Jolanda
1 year ago
I agree, comparing the aged account receivable schedule allowance to the amount of overdue accounts is a key indicator.
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Rhea
1 year ago
But wouldn't comparing it to overdue accounts make more sense in terms of bad debt losses?
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Sol
1 year ago
I disagree, I believe the answer is C) To compare the aged account receivable schedule allowance relative to the amount of expired accounts.
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Rhea
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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