At the End of the Year, Smith Company Has the Following

Multiple Choice

At the end of the year, Smith Company has the following information available: The company uses the percent-of-sales method to estimate uncollectible accounts and has not prepared the year-end adjusting entry for Uncollectible-Account Expense. In the prior year, uncollectible accounts were estimated at 1% of credit sales. What action should Smith Company take in regards to uncollectible accounts at the end of the current year?

A) increase the percentage in the percent-of-sales method
B) reexamine credit policies
C) change to the direct write-off method
D) A and B