Question

Distinguish between the two bases that my be used in estimating uncollectible accounts.

Distinguish between the two bases that my be used in estimating uncollectible accounts.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1


Since bad debts result from sales on account, bad debts can be estimated based on a percentage of sales or a percentage of account receivables.

Under the percentage of receivables basis, the amount of uncollectible account is determined by analysing the individual customer, checking his credit worthiness while in percentage of sales basis, a percentage relationship is established between the sales and uncollectible amount based on the past record.

Percentage of sales method focuses on matching expenses with revenue while the other focuses on net realisable value.


0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The percentage of sales approach to estimating uncollectible accounts expense is used by Kyle company net...
The percentage of sales approach to estimating uncollectible accounts expense is used by Kyle company net credit sales for February amount to 2 million the credit manager estimated that uncollectible accounts expense would be to one percent of net credit sales made during February allowance for devil account currently has $1500 credit for my accounts are determined to be uncollectible and written off The percentage of sales approach to estimating uncollectible accounts expense is used by Kyle company net credit...
Valuing Accounts Receivable – Allowance Method for Uncollectible Accounts HEB Inc. bases estimated uncollectible accounts on...
Valuing Accounts Receivable – Allowance Method for Uncollectible Accounts HEB Inc. bases estimated uncollectible accounts on total credit sales for the period. HEB Inc. estimates that 2% of its $600,000 sales on credit will not be collected. The credit balance in the allowance for uncollectible account before adjustment is $6,000. What is the appropriate ending balance in the allowance for uncollectible account? show work
Cedar Mill, Inc. uses the Aging of Accounts Receivable method for estimating uncollectible accounts. The accounting...
Cedar Mill, Inc. uses the Aging of Accounts Receivable method for estimating uncollectible accounts. The accounting records show the following information at the end of the year: Number of Days Unpaid 0 - 30 31 - 60 61 - 90 Over 90 Accounts Receivable $ 740,000 $ 480,000 $ 220,000 $ 160,000 Estimated % Uncollectible 5 % 10 % 15 % 25 % If the unadjusted credit balance in the Allowance for Doubtful Accounts account before is $30,000, what would...
Some accountants believe that the percent of revenue method for estimating uncollectible accounts expense is superior...
Some accountants believe that the percent of revenue method for estimating uncollectible accounts expense is superior to the percent of receivables method because it is more conservative. True or False The best estimate of the amount of cash a company expects to collect from its accounts receivable is the face value of the receivables. True or False
1) What are some factors considered in estimating the amount of uncollectible accounts receivable? 2) What...
1) What are some factors considered in estimating the amount of uncollectible accounts receivable? 2) What types of costs do businesses avoid when they accept major credit cards as compared with handling credit sales themselves?
2. Better Products is undecided about which base to use in estimating uncollectible accounts. On December...
2. Better Products is undecided about which base to use in estimating uncollectible accounts. On December 31, 2019, the balance in Accounts Receivable was $680,000.   Net credit sales during 2019 amounted to $3,900,000. An analysis of the accounts receivable aging under the percentage of receivables method indicated that $38,000 in accounts receivable is expected to be uncollectible. Past experience has shown that about 1% of net credit sales eventually are uncollectible. Prepare the adjusting entries to record estimated bad debts...
Megan's Products is undecided about which basis to use in estimating uncollectible accounts. On December 31,...
Megan's Products is undecided about which basis to use in estimating uncollectible accounts. On December 31, 2020, the balance in Accounts Receivable was $308,000 and net credit sales amounted to $2,700,000 during 2020. An aging analysis of the accounts receivable indicated that $31,000 in accounts are expected to be uncollectible. Past experience has shown that about 1% of net credit sales eventually are uncollectible. Prepare the adjusting entries to record estimated bad debt expense using the (1) percentage of sales...
Distinguish between acids and bases using Arrhenius, Bronsted-Lowry, and Lewis Theory a) A molecule which can...
Distinguish between acids and bases using Arrhenius, Bronsted-Lowry, and Lewis Theory a) A molecule which can behave as both an acid and a base is said to be amphoteric. Using the Bronsted-Lowry definitions of acid and base, show that methylamine has amphoteric properties
Miller Products uses the allowance method in estimating uncollectible accounts. On December 31, 2022, the balance...
Miller Products uses the allowance method in estimating uncollectible accounts. On December 31, 2022, the balance in Accounts Receivable was $690,000. An aging analysis of the accounts receivable indicated that $29,400 in accounts are expected to be uncollectible. Prepare the adjusting entry to record estimated bad debts expense using the percentage of receivables basis under each of the following independent assumptions: Allowance for Doubtful Accounts has a credit balance of $3,900 before adjustment. (Credit account titles are automatically indented when...
Estimating Uncollectible Accounts and Reporting Receivables over Multiple Periods Barth Company, which has been in business...
Estimating Uncollectible Accounts and Reporting Receivables over Multiple Periods Barth Company, which has been in business for three years, makes all of its sales on credit and does not offer cash discounts. Its credit sales, customer collections, and write-offs of uncollectible accounts for its first three years follow: Year Sales Collections Accounts Written Off 2015 $751,000 $733,000 $5,300 2016 876,000 864,000 5,800 2017 972,000 938,000 6,500 Barth uses the allowance method of recognizing credit losses that provides for such losses...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT