The percent-of-sales method for computing uncollectible accounts:
A)computes Uncollectible-Account Expense as a percent of accounts receivable.
B)takes a balance sheet approach.
C)employs the expense recognition (matching)concept.
D)will result in the same amount of estimated Uncollectible-Accounts Expense as the aging-of-receivables method.

Question

Quizplus · Accepted Answer

The percent-of-sales method focuses on the income statement and computes Uncollectible-Account Expense as a percentage of sales, aligning with the expense recognition (matching) principle by matching expenses with the revenues they help generate.

The Percent-Of-Sales Method for Computing Uncollectible Accounts