Asked by Cynthia Ocampo on Jun 13, 2024
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Companies use two methods to account for uncollectible accounts,the direct write-off method and the allowance method.
Uncollectible Accounts
Accounts receivable that a company does not expect to collect and thus writes off as a loss.
Direct Write-off Method
An accounting practice where uncollectable debts are written off against income at the time they are deemed non-collectable.
Allowance Method
An accounting technique that estimates uncollectible accounts receivable to record bad debts expense, reflecting more accurate accounts.
- Develop an understanding of and explain the techniques of allowance and direct write-off methods employed in accounting for uncollectible accounts.
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Learning Objectives
- Develop an understanding of and explain the techniques of allowance and direct write-off methods employed in accounting for uncollectible accounts.
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