Los Angeles Pierce College Allowance for Doubtful Accounts Discussion Questions

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Cnefvn1017

Business Finance

Los Angeles Pierce College

Question Description

I'm working on a accounting discussion question and need support to help me understand better.

  1. Why do we need an estimate of Bad Debts?
  2. Why do we have a new account, called Allowance for Doubtful Accounts? What does this account represent?
  3. How are the allowance method and the direct write-off method different?
  4. Why isn't the Direct Write-Off method accepted under GAAP?
  5. How can someone manipulate (cook) the books by providing a wrong estimate?

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Explanation & Answer

hello, here is the document, please let me know if you need any changes

Running head: ACCOUNTING DISCUSSION

Accounting Discussion
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Running head: ACCOUNTING DISCUSSION

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Accounting Discussion
1. Why do we need an estimate of Bad Debts?
An estimate of bad debts should be recorded and accounted for every time a company
prepares its financial statements. When left out, the company may overstate its assets
as well as its net income. It also helps the co...

Prff (7124)
Cornell University

Anonymous
Very useful material for studying!

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