Asked by Aa'Kyra Rivers on Jun 16, 2024
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The allowance method of accounting for bad debts matches the estimated loss from uncollectible accounts receivable against the sales they helped produce.
Allowance Method
An accounting technique used to estimate and account for bad debts or uncollectible accounts receivable.
Bad Debts
Accounts receivable that a company considers uncollectible and writes off as a loss in its financial statements.
Sales
The transactions involving the exchange of goods or services for money.
- Recognize the role and mechanics of the allowance method in accounting for bad debts.
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Learning Objectives
- Recognize the role and mechanics of the allowance method in accounting for bad debts.
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