The existing balance in Allowance for Doubtful Accounts is considered in computing bad debts expense in the A. direct write-off

Question

3 years ago

7

The existing balance in Allowance for Doubtful Accounts is considered in computing bad debts expense in the A. direct write-off

method. B. percentage of receivables basis. C. percentage of sales basis. D. percentage of receivables and percentage of sales basis.

Business

1 answer:

AlexFokin [52] · Answer 1 · 2022-07-31T00:53:57+03:00

AlexFokin [52]3 years ago

8 0

The correct answer is choice b - the percentage of receivables basis.

When an accountant is calculating the bad debts expense they will take into account the balance in the Allowance for Doubtful Account when they are calculating on the percentage of sales basis.