Question

The method that uses a certain percentage of each year's net sales to estimate the uncollectible account is called the:

Answer 1

Percentage of net sales method

Step-by-step explanation:

By using the percentage of net sales method, a business assumes that a certain percentage of the year's net sales will be uncollectible. This method relies on historical correlation between sales and uncollectible account from previous periods and can be highly reliable if a strong correlation can be observed.