A Company Is Using the Percentage-Of-Credit-Sales Method to Estimate Their

question 83

Multiple Choice

A company is using the percentage-of-credit-sales method to estimate their bad debts and has noticed that over the past few years there has been a build-up of a debit balance in the Allowance for uncollectibles account.Which of the following is most likely the cause?

• A)They have been consistently overestimating the bad debt expense.
• B)They have been consistently underestimating the bad debt expense.
• C)They have not written off enough accounts.
• D)They have been selling more items on credit.