Asked Jan 8, 2020

Indicate how the percentage-of-receivables method,
based on an aging schedule, accomplishes the objectives
of the allowance method of accounting for bad debts.
What other methods, besides an aging analysis, can be
used for estimating uncollectible accounts?


Expert Answer

Step 1

Objectives of allowance method of accounting for bad debts is to recognize the bad debt expense (expected uncollectibles) in the same period in which related revenue is earned. Percentage of receivables method based on an aging schedule helps to satisfy this...

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