What Is the Difference Between Simple Interest and Compound Interest

question 37

Essay

What is the difference between simple interest and compound interest?

---

Definitions:

Allowance for Doubtful Accounts

A contra-asset account representing the estimated portion of accounts receivable that may not be collected.

Balance Sheet Approach

A method of estimating allowances based on the balances of particular accounts, focusing on the assets and liabilities reported on the balance sheet.

Bad Debts Expense

A provision in accounting for accounts receivable that are not expected to be collected, recognizing them as an expense.

Allowance for Doubtful Accounts

A contra-asset account that represents the amount of accounts receivable a company does not expect to collect.