Question

the percent of sales method for estimating bad debts uses only income statement account balances to estimate bad debts. group startstrue or false

Answer 1

The statement that the percent sales method for estimating bad debts for a company, will only use those balances in the income statement is False.

What is the percent of sales method?

The percent of sales method is one of the methods that companies can use to estimate the bad debts that it expects in a given period. Bad debts refer to those Account Receivables that will not pay the company back even after they have taken goods or services on credit. In order to be able to use the percent of sales method, the sales of a company need to be known.

The sales that a company makes includes both the sales that the company made and the accounts receivable. The Accounts Receivables go to the Balance Sheet and Sales go to the Income Statement. This means that the Balance Sheet balances are used as well as Income Statement balances and not just the latter.

Find out more on the percent of sales method at brainly.com/question/13958992

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