Calculate the allowance for doubtful accounts

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Problem 1: Why is the aging method, used to calculate the allowance for doubtful accounts, preferable to using a single percentage for all receivables? Select all that apply.

a) It assumes that accounts which are current are always fully collectable.

b) It recognizes that older accounts are less likely to be collected.

c) It is easier to assign reasonable percentages to several categories than to use one percentage only for all accounts receivable.

d) It is the only method allowed by GAAP.

e) It can provide a better estimate than a one-size-fits-all approach.

Reference no: EM132951816

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