Question: There are basically two methods of recognizing bad debt expense: (1) direct write-off method, and (2) allowance method. Your Goal: Describe fully both the direct

There are basically two methods of recognizing bad debt expense: (1) direct write-off method, and (2) allowance method.

Your Goal:

  1. Describe fully both the direct write-off method and the allowance method of recognizing bad debt expense.
  2. Discuss the reasons why one of the above methods is preferable to the other and the reasons why the other method is not usually in accordance with generally accepted accounting principles.

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