accounting receivables valuation

label Accounting
account_circle Unassigned
schedule 1 Day
account_balance_wallet $5

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. 

Aug 30th, 2014

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 :)

Aug 30th, 2014

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Aug 30th, 2014
...
Aug 30th, 2014
Oct 21st, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer