Factors that might cause a company to adjust the percentage(s)used to estimate bad debts might include:

Question

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All of the factors listed (state of the local economy in the customer's area, credit ratings of customers, and current situation in the customers' industry or industries) can have an impact on the likelihood of customers failing to pay their debts, and therefore could lead a company to adjust the percentage used to estimate bad debts. Other factors that could also influence such an adjustment might include changes in the company's own credit policies, changes in collection procedures, or changes in the overall level of competition in the market.

Factors That Might Cause a Company to Adjust the Percentage(s)used