Allowance method
The allowance method of accounting for bad debts involves estimating uncollectible accounts at eh end of each period. This provides better matching on the income statement. It also ensures that companies state receivables on the balance sheet at their cash (net) realizable value.
Category: Accounting & Auditing
Previous: ← Direct write-off method
Next: Percentage-of-sales →
More from this Section
- Predetermined overhead rate
The predetermined overhead rate is a rate that based on the relationship between estimated ... - Modified rebuy
Modified rebuy refers to a business buying situation in which the buyer wants to modify ... - Average-cost method
Average-cost method is an inventory costing method that uses the weighted average unit ... - Internal control
Internal control consists of all the related methods and measures adopted within an organization ... - Labor price variance
Labor price variance is the difference between the actual hours times the actual rate ...