Bart has found a cheaper supplier of ice cream. His friend tells him that this is a good idea because it means both his break-even point and margin of safety will go down. Bart is confused as to
whether this is true or false. He has asked you to help.
True or false?
Explain your answer.

Acompany has $80,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. experience suggests that 6% of outstanding receivables are uncollectible. the current credit balance (before adjustments) in the allowance for doubtful accounts is $1,200. the journal entry to record the adjustment to the allowance account includes a debit to bad debts expense for $4,800. true or false