Which Statement About Using the Percentage of Credit Sales to Estimate

question 55

Multiple Choice

Which statement about using the percentage of credit sales to estimate bad debt expense is not correct?

• A)This method has the same results as estimating the bad debt expense by aging the accounts receivable.
• B)This method records an adjustment to the allowance account irrespective of the balance in that account immediately prior to the adjustment.
• C)This method focuses on the income statement.
• D)This method only indirectly measures accounts receivable at net realizable value.

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