As the assistant controller for S Industries you are and are responsible for preparing the year-end adjusting entry to estimate uncollectible accounts receivable. The company uses the Allowance Method. For the current year, you have used the historical percentage of 20% of total year-end accounts receivable as a reasonable estimate of amounts that wont be collected. The controller is concerned about reporting a lower profit for the current year. The controller tells the assistant controller to lower the percentage to 10% this year which would lower the expense resulting in a higher net income. What should you do?

Multiple Choice

• Keep the percentage 20% since this is the most accurate and reasonable estimate for the companys future uncollectible accounts receivable.

• Changing the percentage does not violate an ethical consideration.

• Lower the percentage to 10% to avoid questions from the companys investors.

• Lower the percentage to 10% to make sure the controller gives you a good review and raise this year.