When making the current period's adjusting entry under the percentage of sales method, the balance in...
When making the current period's adjusting entry under the percentage of sales method, the balance in Allowance for Doubtful Accounts is
a.ignored.
b.divided in half and this amount is used for the adjustment.
c.doubled.
d.30% of the amount to be used for the adjustment.
Homework Answers
Answer is ------> Option A -----> Ignored
Explanation :
Under the percentage of sales method the adujsting has to be made without being affecting the allowance for doubtful accounts. However it shall be affected only in case where it has debit balance so has to make it as credit balance. Hence as per general rule it shall be ignored.
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