If an entity uses the percentage of credit sales method of accounting for uncollectible accounts, what are the effects on the financial statements if the entity consistently uses too low a percentage of credit sales for estimating bad debts What are the effects on the financial statements if it con...

If the percentage is too low income will be overstated as will the ...

If an entity uses the percentage-of-credit-sales method of accounting for uncollectible accounts, what are the effects on

Question:

If an entity uses the percentage-of-credit-sales method of accounting for uncollectible accounts, what are the effects on the if the entity consistently uses too low a percentage of credit sales for estimating bad debts? What are the effects on the if it consistently uses too high a percentage? Consider the effects on both the income statement and the balance sheet

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...