Question: Why does the accounting profession require the use of the allowance method of accounting for losses due to bad debts rather than the direct write-off

Why does the accounting profession require the use of the allowance method of accounting for losses due to bad debts rather than the direct write-off method?

Step by Step Solution

★★★★★

3.35 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The allowance method of accounting for uncollectible receivab... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

75-B-A-C-R (581).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Why does the accounting profession make a distinction between internally created intangibles and purchased intangibles?

Why does the allowance method of accounting for bad debts conform to GAAP while the direct write-off method does not?

Does the allowance method for bad debts or the direct write-off method result in the fairest presentation of receivables on the balance sheet and the fairest matching of expenses against revenue?

1.Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables: On 25 February, received RM 500 from Jason and wrote off the remainder owed of...

1. The materiality principle: A) States that an amount can be ignored if its effect onfinancial statements is unimportant to user's businessdecisions. B) Requires use of the allowance method for bad...

Please help 47. On October 12 of the current year, a company's controller determined that a customer's account receivable in AS SET S A. Using the T-account below, prepare the entry to write-off the...

47. On October 12 of the current year, a company's controller determined that a customer's account receivable in the amount of $11.750 was uncollectible and that the account should be written off....

1. Which of the following statements is true regarding the closing process of a merchandiser? A. Sales Discounts, Sales Returns and Allowances and Cost of Goods sold should all be credited during...

Multiple choice 1. At the end of the day, the cash register's record shows $845, but the count of cash in the cash register is $ 850. The correct entry to record the cash sales for the day is: A....

Multiple choice i want the answers ASAP 1. At the end of the day, the cash register's record shows $845, but the count of cash in the cash register is $ 850. The correct entry to record the cash...

The buying and selling commission schedule shown at the top of the next column is from an online discount brokerage firm. Taking into consideration the buying and selling commissions in this...

Find the vertex, focus, and directrix of the parabola. Sketch its graph, showing the focus and the directrix. 1 y = -x 3 2y = -3x 5 y = 8x 2 x = 2y 4 x = - 3y 6 y = - 100x

How can the RFM model be used to measure the effectiveness of a direct marketing campaign?

*13. Suppose an advertisement reported that the mean weight loss after using a certain exercise machine for 2 months was 10 pounds. You investigate further and discover that the median weight loss...

Telemix Company is engaged in the retail sale of high-definition televisions (HDTVs). Each HDTV has a 24-month warranty on parts. If a repair under warranty is required, a charge for the labor is...

Jose Hernandez opened a small motorcycle repair shop, Hernandez Cycle Repair, on January 2, 2011. The shop also sells a limited number of motorcycle parts. In January 2012, Hernandez realized he had...

In its Year-End Countdown Sales, a local Cadillac auto dealer advertised 0% interest 60 months. What role does the time value of money play in this promotion? Assuming that Cadillac is able to borrow...

6. (TCO 4) Ignoring the option to expand: (Points : 4) overestimates the internal rate of return on a project. ignores the possibility that a negative net present value project might be positive,...

Select a major industrial or commercial company based in the United States and listed on one of the major stock exchanges in the United States. Each student should select a different company. Avoid...

Olsen Outfitters Inc. believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax rate is 40%. Olsen must raise additional capital to fund its upcoming...