At the end of the year,Smith Company has the following information available: The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense.In the prior year,uncollectible accounts were estimated at 1% of credit sales.What action should Smith Company take in regards to uncollectible accounts at the end of the current year?
A)increase the percentage in the percent-of-sales method
B)reexamine credit policies,especially the extension of credit
C)change to the direct write-off method
D)A and B

Question

At the end of the year,Smith Company has the following information available:  The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense.In the prior year,uncollectible accounts were estimated at 1% of credit sales.What action should Smith Company take in regards to uncollectible accounts at the end of the current year?
A)increase the percentage in the percent-of-sales method 
B)reexamine credit policies,especially the extension of credit 
C)change to the direct write-off method 
D)A and B

Quizplus · Accepted Answer

The Answer of At the end of the year,Smith Company has the following information available:  The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense.In the prior year,uncollectible accounts were estimated at 1% of credit sales.What action should Smith Company take in regards to uncollectible accounts at the end of the current year?
A)increase the percentage in the percent-of-sales method 
B)reexamine credit policies,especially the extension of credit 
C)change to the direct write-off method 
D)A and B

At the End of the Year,Smith Company Has the Following