All of the following are features of the percentage of credit sales method except
A)emphasizes earnings statement relationships.
B)focuses on asset valuation.
C)determines bad debts expense directly.
D)focuses on income measurement.

Question

Quizplus · Accepted Answer

The percentage of credit sales method does not focus on asset valuation, but rather on the estimation of bad debts expense and its impact on income measurement. It is a method used to determine bad debts expense directly based on a percentage of credit sales made during a period. It emphasizes earnings statement relationships by matching the expense with the revenue earned in the same period.

All of the Following Are Features of the Percentage of Credit