The percentage-of-receivables method for estimating uncollectible accounts is sometimes described as: A. The balance sheet method. B. The income statement method. C. The aging method. The sales method.

Question

Kaliyah Brooks

Business

3 August, 08:55

The percentage-of-receivables method for estimating uncollectible accounts is sometimes described as: A. The balance sheet method. B. The income statement method. C. The aging method. The sales method.

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Answers (1)

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Jamari Roach · Answer 1

C. The aging method.

Explanation:

The percentage-of-receivables method is a balance sheet method is also called the aging method and is used to estimate bad loans that a business has as a percentage of ending accounts recievables. Usually a process called aging of accounts receivable is used.

The aging method involves estimation of companie's recievables not collected by sorting customer's unpaid invoices by date into four columns: invoice amount not due yet, invoice amounts 1-30 days past due, invoice amounts 31-60 days past due, and invoice amounts greater than 61 days past due.