Question: Historical data should be used to determine the percentage for uncollectible account expense. The higher the percentage, the lower the net income and the lower

Historical data should be used to determine the percentage for uncollectible account expense. The higher the percentage, the lower the net income and the lower the income tax. Jitters Corporation, a coffee distributor, has historical data that indicate 5 percent of its sales will become uncollectible. This has been a great year for Jitters. Jitters would like to record additional uncollectible account expenses to provide a "cushion" in the Allowance for Uncollectible Accounts in case next year's results are not as good as the current year. Jitters has decided to increase the percentage for un-collectibles to 9 percent because of the high sales volume. This will increase the uncollectible account expense and thus reduce the uncollectible account expense next year. Is this ethical? If not, what would be a preferred action?

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