Question

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

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Answer #1

Answer- FALSE- The percent of revenue method for estimating uncollectible accounts expense is superior to the percent of receivables method because it is more conservative.

Explanation-The present of receivable method is more conservative compare with the percent of revenue method because formal method is based on ageing of receivables.

Answer- 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

Explanation- The best estimate of the amount of cash a company expects to collect from its accounts receivable is the net realizable value of its accounts receivable.

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