Which method of estimating bad debt expense focuses on matching that expense to revenues generated from offering credit sales?
A)net method
B)allowance method
C)aging method
D)percentage-of-sales method

Question

Quizplus · Accepted Answer

The percentage-of-sales method focuses on estimating bad debt expense based on a percentage of credit sales. This ensures that the expense is matched to the revenues generated from offering credit sales. The net method only considers actual write-offs, while the allowance method and aging method estimate bad debt based on aging schedules and historical data, respectively.

Which Method of Estimating Bad Debt Expense Focuses on Matching