question archive Bases Used for Allowance Method Two Bases Used for Estimating Allowance Amount 1- Percentage of Sales approach: • Focus on "Bad debt expense" estimate, existing balance in the allowance account is ignored
Bases Used for Allowance Method Two Bases Used for Estimating Allowance Amount 1- Percentage of Sales approach: • Focus on "Bad debt expense" estimate, existing balance in the allowance account is ignored
Subject:AccountingPrice: Bought3
Bases Used for Allowance Method Two Bases Used for Estimating Allowance Amount 1- Percentage of Sales approach: • Focus on "Bad debt expense" estimate, existing balance in the allowance account is ignored. • Method achieves a matching of cost and revenues. 2- Percentage of Receivables approach: • Accurate valuation of receivables on the balance sheet. • Method may also be applied using an aging schedule. • Existing balance in allowance account considered.
