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Question -
1) Where will the allowance for uncollectible accounts be reported in a classified balance sheet?
a) In the noncurrent asset section
b) In the equity section
c) In the current asset section
d) In the noncurrent liability section
e) In the current liability section
2) Define Gross Margin Percentage. Generally speaking, if a company has high Gross Margin Percentage what does that mean about it's selling price relative to it's COGS.
3) Briefly explain the disadvantage of using the direct write-off method for dealing with uncollectable accounts (besides that it violates GAAP's matching principle).
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