How does the allowance method provide a more accurate report

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Question - What is the rationale for the calculations/process used to estimate the $180,000 uncollectible allowance?

In this section, you want to refer back to chapter 9 in your textbook and review the process for determining the allowance for bad debt. What is most important in getting started on this assignment is to make sure you first understand why companies use the allowance method for accounting for receivables. The focus is not on the calculation itself, but the rationale for using the allowance method in comparison with the direct write-off method. Why is accounting for uncollectible receivables necessary? How does the allowance method provide a more accurate reporting result?

Reference no: EM132567117

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