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Running head: ACCOUNT RECEIVABLE 1 ACCOUNT RECEIVABLES Institution Affiliation Student Name Date
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ACCOUNT RECEIVABLES 2 A direct write off method is a method used for accounting for all uncollectable account receivables. With this, the company will record the amount as bad debt when they notice that the customer account receivable is not collectible. However, this method is mostly used by small companies and also by the large business that deals only with mostly cash, ( Bunsis, 2017). There is no allowance for these accounts and also it only records the uncollectable account as an expense only when a given account is written off. On the other hand, the allowance method is one which accounts for the uncollectable account receivables that the company has estimated as bad debt and expense without having to wait to see if the customer will collect or not. This is an allowance that the company estimate from a bad debt they anticipate from some specific account receivable. Allowance method calculates the percentage of the receivables and the percentage of
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  • Fall '10
  • RobertCarr
  • Debt, Generally Accepted Accounting Principles, Journal of, Goulder

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