How can an estimate of the uncollectible accounts expense be estimated in advance of the write-off using the Allowance method?

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Quizplus · Accepted Answer

The most accurate way to estimate the uncollectible accounts expense using the Allowance method is to use a percentage of credit sales or a percentage of accounts receivable. This takes into account both the amount of credit sales that are made and the age of the accounts, giving a more accurate estimate of the amount of uncollectible accounts that are likely to occur. Using cash sales or newer receivables alone would not give an accurate estimate of the potential uncollectible accounts expense.

How Can an Estimate of the Uncollectible Accounts Expense Be