In making the adjusting entry for uncollectible accounts, a company may use the percent of sales...

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Accounting

In making the adjusting entry for uncollectible accounts, acompany may use the percent of sales method or the percent ofreceivables method. Briefly describe each method and explain whichmethod you would prefer to use and why?

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Percentage of sales method Under this method adjusting entry for uncollectible is made on the basis of a percentage amount of credit sales Suppose credit sales is 50000 and it is estimated that uncollectible will be 5 then adjustig entry will be made as follow Bad debts expenses 50000 005 2500 Allowance for doubtful See Answer

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In making the adjusting entry for uncollectible accounts, a company may use the percent of sales...

70.2K

Verified Solution

Question

Accounting

In making the adjusting entry for uncollectible accounts, acompany may use the percent of sales method or the percent ofreceivables method. Briefly describe each method and explain whichmethod you would prefer to use and why?

Answer & Explanation Solved by verified expert

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