Homework Answers
Answer: False
Explanation:
Under the percentage of receivables method,
Amount which is calculated with the percentages on Accounts receivable is the 'Ending balance' of the 'Allowance for bad debts account'. And
The difference between the 'Current balance' and 'Ending balance' of 'Allowance for bad debts account' is 'Bad debt expense-Adjustment'.
So that, the adjusting entry at the end of the period for bad debt expense is affected by the current balance in the allowance for bad debt expense.
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