Which of the Following Statements Is True Regarding the Two

question 70

Multiple Choice

Which of the following statements is true regarding the two allowance approaches used to estimate bad debts?

• A) The percentage-of-sales approach takes into account the existing balance in the Accounts Receivable account.
• B) The direct write-off method takes into account the existing balance in the Allowance for Bad Debts account.
• C) The percentage-of-receivables approach takes into account the existing balance in the Allowance for Bad Debts account.
• D) The direct write-off method does a better job of matching revenues and expenses than allowance method.

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