The allowance method for uncollectible accounts receivable is similar to the allowance method for estimated warranty costs because

Multiple Choice

All the three statements about allowances are correct

None of the other alternatives are correct

Estimates of future events are made and the cost to the business is charged to income in the period of sale

Both the Allowance for Uncollectible Accounts and the Allowance for Warranties are liability accounts

The expense is debited directly to Retained Earnings and does not appear on the income statement