Harry's Hardware estimates that approximately $1.75 out of every $100 of credit sales proves to be uncollectible.Harry calculates Bad Debts Expense using the:
A)aging the Accounts Receivable approach.
B)direct write-off method.
C)balance sheet approach.
D)income statement approach.

Question

Quizplus · Accepted Answer

The income statement approach estimates bad debts as a percentage of credit sales, which aligns with Harry's method of estimating uncollectible amounts as a percentage of sales.

Harry's Hardware Estimates That Approximately $1