Advise a new accounting student which of the following statements concerning the estimation of uncollectible accounts expense
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Question:
Advise a new accounting student which of the following statements concerning the estimation of uncollectible accounts expense using the percentage-of-sales method is correct?
a.
It causes no adjustment to the allowance account.
b.
It emphasizes the matching of revenues and expenses on the income statement.
c.
It causes an adjustment to the allowance account based on the balance in that account immediately prior to the adjustment.
d.
It is based on the net realizable value of the accounts receivable.
e.
It produces the same results as an aging of accounts receivable.
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