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In Unit 3, we examined the various aspects of determining the amounts of accounts receivables that are uncollectible. We looked at the percentage of sales
In Unit 3, we examined the various aspects of determining the amounts of accounts receivables that are uncollectible. We looked at the percentage of sales method as well as the aging method to determine how much a company would not reasonably receive from customers' credit account
After reviewing the materials in Chapter 7 and in Unit 3, please answer the following questions:
- Why do businesses choose the method (i.e. percentage of sales or aging)?
- What are some of the factors they consider when making this decision?
- What are some unintended consequences of choosing a method; in other words, what are some things that the method chosen will NOT consider?
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