The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is:
A) The percent of accounts receivable method.
B) Factoring method.
C) The percent of sales method.
D) Direct write-off method.
E) The aging of accounts receivable method.

Question

Quizplus · Accepted Answer

The allowance method based on the idea that a given percent of a company's credit sales for the period is uncollectible is known as the percent of sales method. It involves estimating the amount of uncollectible accounts based on a percentage of credit sales made during a certain period. This method is widely used by companies to account for bad debts in their financial statements.

The Allowance Method Based on the Idea That a Given