Explain how a company estimates bad debts using (a) The sales or income statement approach, and (b)

Question:

Explain how a company estimates bad debts using

(a) The sales or income statement approach, and

(b) The accounts receivable or balance sheet approach.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...