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.

---

Definitions:

Unfair Judgment

The act of forming an opinion or conclusion that is biased, unjust, or lacks impartiality.

Reporter

A journalist who investigates, collects, and presents information as news.

Inaccuracy

The quality of being incorrect or not precise, often leading to errors in understanding or representation.

Newsworthy

Information or events considered significant or interesting enough to be reported in the news media.