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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
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BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Describe the process followed when estimating uncollectible accounts under the percentage (aging) of receivables method.

To determine

Explain the process followed when estimating uncollectible accounts using the percentage (aging) of receivables method.

Explanation

Percentage-of-receivables method:

Under percent-of-receivables method, the estimated uncollectible receivables are computed, by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period.

  • The estimated uncollectible receivable is the target balance of allowance for bad debts account.
  • Then, the target balance of allowance for bad debts account are used to determine the bad debt expense of the period, after adjusting the previous balance in the allowance for bad debts...

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