035 Uncollectiblle - Direct Write-Off Method

Question 1

Describe the Allowance Method of Accounting for Bad Debts.

Answer 1

Determine the amount uncollectible and provide an Allowance to measure Accounts Receivable at net realizable value.

Question 2

Describe the Direct Write-Off Method for Bad Debts.

Answer 2

Direct write off records bad debt expense only when a specific account receivable is considered uncollectible and is written off. Direct write-off method is rarely used.

Question 3

Which method of accounting for uncollectible accounts receivable is required if uncollectible accounts are probable and estimable?

Answer 3

The Allowance method.

Question 4

What is the preferred method of accounting for uncollectible accounts receivable?

Answer 4

Allowance method.