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What is the best method for avoiding miscommunication?
Allowance Method
An accounting technique used to adjust accounts receivable for debts that are expected not to be collected.
Uncollectible Receivables
Accounts receivable that are considered irrecoverable and unlikely to be collected, leading to their removal from the accounts.
Allowance for Doubtful Accounts
An estimate of the amount of credit sales that are expected not to be collected.
Percent of Sales Method
A financial forecasting model that estimates changes in balance sheet accounts by using a fixed percentage of projected sales.
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