Allowance for Doubtful Accounts

question 160

Essay

Allowance for doubtful accounts.
When a company has a policy of making sales for which credit is extended, it is reasonable to expect a portion of those sales to be uncollectible. As a result of this, a company must recognize bad debt expense. There are basically two methods of recognizing bad debt expense: (1) direct write-off method, and (2) allowance method.

Instructions

(a) Describe fully both the direct write-off method and the allowance method of recognizing bad debt expense.
(b) Discuss the reasons why one of the above methods is preferable to the other and the reasons why the other method is not usually in accordance with generally accepted accounting principles.

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Definitions:

Hegemonic Masculinity

The culturally dominant idea of male behavior, which focuses on strength, dominance, and emotional detachment, often at the expense of other masculinities.

Femininities

The qualities or attributes regarded as characteristic of women or female identities, shaped by societal norms and personal identity.

Heterosexual Epoch

A term used to describe historical periods or societal contexts where heterosexuality is assumed to be the default or normative sexual orientation.

First Years

A term often used to refer to the initial period of an endeavor or the early stages in a person's life or career.