If a Company Uses a Percentage of Net Sales in Computing

question 15

Multiple Choice

If a company uses a percentage of net sales in computing the amount of uncollectible accounts expense:

• A)No valuation allowance will be required.
• B)The relationship between revenue and expenses is being stressed more than the valuation of receivables at the balance sheet date.
• C)The existing balance in the Allowance for Doubtful Accounts will be increased sufficiently to equal the probable loss indicated by the percentage of net sales computation.
• D)Any past-due accounts will be listed as a separate item in the balance sheet.

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Résumé

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Employer's Objective

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