Choice "B" is correct. If a second, similar retail outlet were opened, one would expect sales and accounts receivable to double. As long as the collection rates for the new outlet's receivables were expected to be similar to those of the original outlet, however, the allowance for doubtful accounts as a percentage of accounts receivable would remain the same.
Choice "d" is incorrect. If the client sold more merchandise to customers with poor credit ratings, the allowance for doubtful accounts as a percentage of receivables should increase to reflect the greater level of estimated bad debts.
Choice "a" is incorrect. Write off of a specific account receivable reduces both the allowance and the receivable by the amount written off. If there were twice as many write-offs in the previous year than in the current year (and this were the only difference), the allowance for doubtful accounts as a percentage of receivables would not stay the same.Choice "c" is incorrect. If more receivables are potentially uncollectible in the current year (as opposed to the prior year), the allowance for doubtful accounts as a percentage of receivables should increase to reflect the greater level of estimated bad debts.