Question

A company that wishes to emphasize better matching of expenses with revenues rather than a better estimate of net realizable value should use the percentage-of-receivables approach for estimating uncollectible accounts.

O True
O False

Answer 1

True.

Percentage-of-receivables approach (balance sheet approach) states that the amount of doubtful accounts at the end of a reporting period can be calculated by applying a percentage of estimated uncollectible amounts to gross accounts receivable