The advantage of relating a company's bad debt expense to its outstanding accounts receivable is that this approach
a. gives a reasonably correct statement of receivables in the balance sheet.
b. best relates bad debt expense to the period of sale.
c. is the only generally accepted method for valuing accounts receivable.
d. makes estimates of uncollectible accounts unnecessary.
Answer: a. gives a reasonably correct statement of receivables in the balance sheet.
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Which of the following is true?
A. The major difference between the quick and current ratios is inventory. B. Current liabilities are the denominator in the quick and current ratios. C. Companies that sell expensive merchandise tend to have high inventory turnover ratios. D. Both A and B are true.
Predicting economic and income growth rates is particularly important when researching which type of market?
A) existing markets B) latent markets C) parallel markets D) incipient markets E) local markets