The percentage-of-credit-sales method (income statement method)is allowed only if amounts do not differ significantly from estimates using the percentage-of-receivables method.

Question

Quizplus · Accepted Answer

This statement is true. The percentage-of-credit-sales method can only be used if the estimated bad debt amounts do not differ significantly from estimates using the percentage-of-receivables method. If there is a significant difference, the percentage-of-receivables method must be used instead.

The Percentage-Of-Credit-Sales Method (Income Statement Method)is Allowed Only If Amounts