Even though the direct write-off method is not acceptable for generally accepted
accounting principles (GAAP) reporting. Propose an alternative method to increase the accuracy of reporting. Explain
direct write-off method is not acceptable for generally accepted accounting principles.
Alternatively you can do the following
the Debit balance of Bad Debts from the Trial balance XXXXXXX
Add: New Bad Debts (adjustments) XXXXX
Add: New Provision or Reserve (adjustments) XXXXX
Add: New Discount on Debtors (adjustments) XXXXX
Credit balance of Old Provision or Reserve from the Trial balance XXXXX
Final Amount that should be entered in
Dr side of P/L A/c. XXXXX
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