Introduction to Financial Accounting AMIS 211 – Professor Marc Smith 1 Chapter 7, Module 5 Chapter 7, Module 5 Slide 1 AMIS 211Introduction to Financial AccountingProfessor Marc SmithChapter 7 Module Chapter 7 Module 5Hi everyone. Welcome back. Just as a refresher before we jump into the key point of this Module. Because I know that this is tough—this is not an easy topic. This tends to be one of the more challenging topics that we cover. You really want to keep in mind that your Allowance for Doubtful Accounts is keeping track of two (2) specific items: 1) On the increase—or credit side—it is keeping track of your bad debt expense estimates that you have made. 2) On the decrease—or debit side—it is keeping track of the actual write-offs that you have had. So, at any point in time, you can look at that account. If the balance is on the credit side, we have written off less than we had thought. If the balance is on the debit side, we have written off more than we had estimated that we would write-off.
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