Write a Short Paragraph Explaining the Following

question 111

Essay

Write a short paragraph explaining the following:
1. When bad debts are estimated, why is the balance in Allowance for Doubtful Accounts considered when the percentage of accounts receivable approach is used but not when the percentage of net credit sales approach is used?
2. When estimating bad debts on the basis of a percentage of accounts receivable, what is the advantage of using an aging schedule?

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Definitions:

Production

The process of creating goods and services through the combination of labor, materials, and technology.

Pizza

A popular Italian dish made of dough topped with tomatoes, cheese, and often various other ingredients, baked together.

Marginal Benefit

The additional satisfaction or utility received by consuming one more unit of a good or service.

Additional Slice

A term that can refer to an extra serving or portion of a good or product beyond what is normally consumed.