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Is it appropriate to use a hybrid of the percentage of sales and the percentage of receivables methods of calculating the allowance for doubtful accounts? Do the generally accepted accounting principles allow for using both methods at the same time? Why?
Weegy: Small Business > Running a Business > Sales Percentage of Receivables Vs. Percentage of Sales by Kenneth V. [ Oster, Demand Media Google Accountants use accounting procedures to reconcile noncollectable accounts. Accountants use accounting procedures to reconcile noncollectable accounts. Related Articles Gross Sales vs. Percentage of Payroll The Recommended Percentage of Sales for a Marketing Budget Sales Expense vs. Revenue Percentage Limitations of the Percentage of Sales Forecasting Method Added Sales as a Percentage of Total Sales Equation Tracking Goals Vs. Sales Percentage Percentage of receivables and percentage of sales are two accounting allowance methods used to reconcile customer accounts deemed noncollectable. When allowed by generally accepted accounting principles (GAAP), these two strategies are preferred over direct write-off of bad debt expenses. Percentage of receivables and percentage of sales provide a business with the ability to accurately estimate the expected bad debt losses they will have in each succeeding fiscal reporting period. ] (More)
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