Question

1. The two methods to estimate uncollectible accounts are

a.percent of sales and analysis of receivables.

b.percent of receivables and analysis of receivables.

c.direct write-off and analysis of receivables.

d.percent of sales and direct write-off.

2. The direct write-off method is acceptable for use by businesses when

a.they sell most of their goods or service for cash or credit card.

b.a large amount of receivables will become uncollectible.

c.they have large receivable balances as a part of current assets.

d.they make all their sales on account and do not have cash sales.

Answer 1

1

The two methods to estimate uncollectible accounts are percent of sales and direct write-off.

Under the direct write off methof, uncollectible accounts expense is recognized only when accounts are written off

Under the .percent of sales method, an estimated percentage of sales is recognized as uncollectible accounts expense at the end of every period.

Option D is correct

2

The direct write-off method is acceptable for use by businesses when they sell most of their goods or service for cash or credit card.

Option A is correct