At the End of the Year,Smith Company Has the Following

question 29

Multiple Choice

At the end of the year,Smith Company has the following information available: The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense.In the prior year,uncollectible accounts were estimated at 1% of credit sales.What action should Smith Company take in regards to uncollectible accounts at the end of the current year?

• A)increase the percentage in the percent-of-sales method
• B)reexamine credit policies,especially the extension of credit
• C)change to the direct write-off method
• D)A and B

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