The Percentage-Of-Sales Procedure Arises from the Idea That Uncollectible Amounts

question 93

True/False

The percentage-of-sales procedure arises from the idea that uncollectible amounts will vary with the volume of credit business.The firm estimates the appropriate percentage by studying its own experience or by inquiring into the experience of similar firms.Default rates generally fall within the range of .01% to .02% of credit sales.

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