Receivables Flashcards
1
Q
Under CECL what effect does a collection on a write off have for the allowance account?
A
A collection increases the allowance account.
2
Q
Is the direct write-off method compliant with GAAP?
A
No
3
Q
The direct write-off method is….
A
required for tax reporting
recognized when deemed uncollectible
does not use allowance account
reported as gross amount
4
Q
The allowance account is…
A
required for financial reporting
estimated at the end of each period
uses the allowance account
reported at new carrying value
5
Q
How do you calculate gross AR?
A
Beginning balance + credit sales+ reinstatement of write-offs - collections - write-offs - recoveries = ending balance
