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Direct Write-Off Method
An accounting approach where uncollectible accounts receivable are written off directly to expense as they are identified.
Accounting Equation
The foundational equation in accounting, Assets = Liabilities + Equity, representing the relationship between a company's resources and claims against them.
Uncollectible Account
A receivable that a company has deemed unlikely to be collected and therefore considered as a loss.
Allowance Method
An accounting technique that estimates uncollectible accounts receivable and records those estimates as an expense, providing a more accurate representation of net income.
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