Asked by Shenette Arnwine-Smart on Jun 15, 2024
Verified
The allowance method estimates bad debts expense at the end of each accounting period.
Allowance Method
The allowance method is an accounting technique that estimates and accounts for bad debts, recognizing that a certain percentage of accounts receivable may not be collectible.
Bad Debts Expense
The portion of accounts receivable that is estimated to be uncollectible during a period.
- Acquire knowledge of and describe the allowance and direct write-off methods for managing uncollectible accounts in accounting.
Verified Answer
KG
Katie GrassaJun 21, 2024
Final Answer :
True
Explanation :
The allowance method estimates bad debts expense at the end of each accounting period based on a percentage of accounts receivable or using a specific analysis of individual customer accounts.
Learning Objectives
- Acquire knowledge of and describe the allowance and direct write-off methods for managing uncollectible accounts in accounting.
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