Do record at the same time allowance for doubtful accounts

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There was one sale of inventory with a cost of $10,000 and a selling price of $20,000 where the credit manager predicted only a 10% chance of actually getting paid but the transaction was carried out anyway - the terms of the sale required payment in 60 days this amount has not yet been collected and is not yet overdue as at December 31 (yearend for a company).

Problem 1: Assuming accrual method is used, do we also record at the same time Allowance for Doubtful Accounts (which is equal to $20,000 as there is only a 10% chance to receive cash?) in accordance with the matching concept?

Reference no: EM132936258

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