The percentage-of-credit-sales method for estimating uncollectible accounts is commonly referred to as the income statement method,because it always results in a higher amount of net income being reported in the income statement.

Question

Quizplus · Accepted Answer

The percentage-of-credit-sales method is called the income statement method because it focuses on estimating bad debts based on sales, not because it results in higher net income. It does not inherently lead to higher net income.

The Percentage-Of-Credit-Sales Method for Estimating Uncollectible Accounts Is Commonly Referred