The_______________ produces the better estimate of cash realizable value and reflects a statement of financial position viewpoint.

Question

Quizplus · Accepted Answer

The percentage of receivable basis estimates the net realizable value of accounts receivable by taking into account the historical percentage of bad debts for the company and applying it to the current accounts receivable balance. This method is preferred as it provides a more accurate representation of the true value of accounts receivable from a financial statement standpoint. The direct write-off method is not considered a reliable method, factoring accounts receivable is a financing option rather than an accounting method, and the expense recognition principle is a broader accounting concept not directly related to estimating cash realizable values.

The_______________ Produces the Better Estimate of Cash Realizable Value and Reflects