The percent-of-sales method to compute uncollectible accounts is also known as the balance sheet approach.

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The percent-of-sales method is also known as the income statement approach because it is based on estimating bad debts as a percentage of credit sales for the period. The balance sheet approach involves estimating the ending balance of accounts receivable and applying a percentage to that balance to estimate the amount of uncollectible accounts.

The Percent-Of-Sales Method to Compute Uncollectible Accounts Is Also Known