Explain the Difference Between Estimating the Amount of Uncollectible Accounts

question 83

Essay

Explain the difference between estimating the amount of uncollectible accounts using the approaches based on percent of sales and accounts receivable.

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Definitions:

Binding Contract

An agreement between two or more parties that is enforceable by law, where all parties have agreed to the terms through offer and acceptance.

Contractual Capacity

The legal ability of a person to enter into a binding contract.

Form a Contract

The process of creating a legally binding agreement between two or more parties.

Consideration

The benefit which is bargained for between the parties and is the essential reason for a party entering into a contract.