Discuss the two methods for recording bad debt expense. What type of company uses each method?
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- Which method delays recognition of bad debt until the specific customer accounts receivable is identified? A. income statement method B. balance sheet method C. direct write-off method D. allowance methodWhat are some different methods that can be used for customer returns/bad debt?What happens if companies use the direct write-off method in accounting for bad debts? What will be the effect in the financial statements?
- how do companies account for bad debt? Why would they use an allowance account instead of directly crediting A/R? What are the various methods of accounting for bad debt? Describe the differences in how the expense is calculated.What are bad debts? What are the two most common receivables ratios, and what do these ratios tell a stakeholder about the company? What is a possible ramification of deferred revenue reporting?What are some factors to consider in evaluating a company's ability to make payments on outstanding debt? Please explain the factors rather than just providing a list.
- What are some different methods that can be used for customer returns/bad debt? which way do you feel most accurately reflects these balances and why?Answer the following questions in depth .... Isn't estimating bad debts a way of manipulating net income? How does a company keep control on these estimates? How does one go about determining if noncollectable receivables are within a reasonable range?How would the transactions be reconciled if the allowance for bad debt is converted to a bad debt write off but the company is able to recoup the funds?
- In accounting for bad debts, how do the income statement approach and the balance sheet approach differ?What are the two methods of accounting for bad debts? Which is in accordance with GAAP?Which of the following relationships best describes the percentage of receivables basis of valuing accounts receivable? O A. Matching, emphasis on statement of financial position relationships. O B. Matching, emphasis on income statement relationships. Oc. Cash realizable value, emphasis on statement of financial position relationships. O D. Cash realizable value emphasis on income statement relationships.