The Percentage of Sales Method, Rather Than the Percentage of Receivables

question 193

Multiple Choice

The percentage of sales method, rather than the percentage of receivables method, would be used to estimate uncollectible accounts if an organization seeks to:

• A) Use an aging schedule to more closely estimate uncollectible accounts.
• B) Eliminate the need for an allowance for doubtful accounts.
• C) Emphasize the accuracy of the net realizable value of the receivables on the balance sheet.
• D) Use a method that approximates the matching principle.

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Definitions:

Production Steps

The series of phases or actions taken to manufacture a product, from raw materials to the final goods.

Forward Scheduling

A planning method that starts from a particular date and moves forward in time to determine the timeline for project or production activities.

Backward Scheduling

A method of scheduling tasks starting with the end goal and working backward to determine the necessary steps and timing.

Christmas Shopping

The purchasing of gifts, decorations, and other festive items in preparation for the Christmas season, typically involving increased retail activity.