Asked by Griffinn Kluth on Apr 25, 2024
Verified
The two methods of accounting for uncollectible accounts are (a) percentage of sales and (b) percentage of receivables.
Percentage of Sales
A financial ratio that compares a company's profitability, expanses, or other financial indicators to its total sales, often expressed as a percentage.
Percentage of Receivables
A method used to estimate the amount of receivables that will not be collected by calculating a percentage based on historical data.
- Determine the techniques used for approximating the value of accounts receivable that cannot be collected.
Verified Answer
UZ
umair zulfiqar6 days ago
Final Answer :
False
Explanation :
The two primary methods of accounting for uncollectible accounts are (a) the direct write-off method and (b) the allowance method, which includes both the percentage of sales and the percentage of receivables approaches.
Learning Objectives
- Determine the techniques used for approximating the value of accounts receivable that cannot be collected.
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