The percentage of receivables method of estimating uncollectible accounts is based on the relationship between the amount of accounts payable and the amount of uncollectible accounts.

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The percentage of receivables method is based on the relationship between the total amount of accounts receivable and the estimated percentage of those receivables that will ultimately prove uncollectible. It is not based on the relationship between accounts payable and uncollectible accounts.

The Percentage of Receivables Method of Estimating Uncollectible Accounts Is