Business Finance
accounting receivables valuation

Question Description

Can you help me understand this Accounting question?

Discuss the primary advantages and disadvantages of applying the direct write-off and the allowance method of writing off accounts. take a position on whether or not estimating the allowance for doubtful accounts distorts gross income. 

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

100% original and plagiarism free as always:

Answer:

  Advantages:

·  Simple accounting entries are entered in books of accounts.

·  It takes less time to make an adjustment after this. 

Disadvantages:

·  Chances of committing errors are more causing material misstatements.

·  This is against matching principles.

·  Profit amount can be overstated easily.

Estimation of provision for doubtful debts contains careful procedures to calculate amount, hence this cannot distort gross income figure. 

Please rate me. thanks in advance :)

johnalia (1058)
University of Maryland

Anonymous
Top quality work from this tutor! I’ll be back!

Anonymous
Heard about Studypool for a while and finally tried it. Glad I did caus this was really helpful.

Anonymous
Thank you! Reasonably priced given the quality

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4