The percentage of receivables basis for estimating uncollectible accounts emphasizes
A) cash realizable value.
B) the relationship between accounts receivable and bad debts expense.
C) income statement relationships.
D) the relationship between sales and accounts receivable.

Question

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The percentage of receivables basis for estimating uncollectible accounts focuses on calculating the cash realizable value of accounts receivable. It determines the amount of receivables that can actually be collected and is therefore an important measure of a company's ability to collect its debts.

The Percentage of Receivables Basis for Estimating Uncollectible Accounts Emphasizes