Westermen, Inc., sells merchandise for cash and on account. The business uses the direct write-off method of
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Westermen, Inc., sells merchandise for cash and on account. The business uses the direct write-off method of recording uncollectible accounts expense. For the past two years, the amount of uncollectible accounts written off each year has been about 1.0% of the net sales. Net sales last year totaled \($416,228.00.\) An accountant recommends that the business change to the allowance method of recording uncollectible accounts expense. However, management is reluctant to accept the recommendation because the business has used the direct write-off method for a long time and personnel fully understand it. What do you recommend and why?
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