Write a short paragraph explaining the following:
1. When bad debts are estimated, why is the balance in Allowance for Doubtful Accounts considered when the percentage of accounts receivable approach is used but not when the percentage of net credit sales approach is used?
2. When estimating bad debts on the basis of a percentage of accounts receivable, what is the advantage of using an aging schedule?

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The Answer of Write a short paragraph explaining the following:
1. When bad debts are estimated, why is the balance in Allowance for Doubtful Accounts considered when the percentage of accounts receivable approach is used but not when the percentage of net credit sales approach is used?
2. When estimating bad debts on the basis of a percentage of accounts receivable, what is the advantage of using an aging schedule?

Write a Short Paragraph Explaining the Following