Question 28 1 point Which of the following approaches for ba

Question 28 (1 point) Which of the following approaches for bad debts conforms to Generally Accepted Accounting Principles a) Percentage of receivables method b) Direct write-off metod c) Percentage of credit sales method d) Both a and c

Solution

There are three GAAP Procedures for estimating (forcasting) the allowance of bad debt: 1 The Percentage of Credit Sales Method 2 The Ageing of AR Method (A Variation of the Preceeding) 3 The Percentage of Ending Account Recievables Method After you complete the computation, you report the allowance for bad debts on the Balance Sheet as a deduction from Account Recievables So with the given options in the given problem answer is Both A & C.