Which of the following statements is true regarding the two allowance approaches used to estimate bad debts?
A) The percentage-of-sales approach takes into account the existing balance in the Accounts Receivable account.
B) The direct write-off method takes into account the existing balance in the Allowance for Bad Debts account.
C) The percentage-of-receivables approach takes into account the existing balance in the Allowance for Bad Debts account.
D) The direct write-off method does a better job of matching revenues and expenses than allowance method.
C
You might also like to view...
Which of the following financial incentives or rewards are manager determined?
a. pooled tips b. longevity Pay c. Group incentive plan d. Gratuities
Jax Recording Studio purchased $7,800 in electronic components from Music World. Jax signed a 60-day, 8% promissory note for $7,800. Music World's journal entry to record the sales transaction is:
A. Debit Notes Receivable $7,904; credit Sales $7,904 B. Debit Accounts Receivable $7,800; credit Sales $7,800 C. Debit Notes Receivable $7,800; credit Sales $7,800 D. Debit Notes Receivable $7,800; debit Interest Receivable $104; credit Sales $7,904 E. Debit Accounts Receivable $7,904; credit Sales $7,904
A buyer who does not cover is precluded from consequential damages that could have been prevented if the buyer did obtain cover
a. True b. False Indicate whether the statement is true or false
"To A for life" is an example of a life estate
Indicate whether the statement is true or false