Q8(c): Discuss the differences and implications between the ‘allowance method’ and the ‘direct write-off method’ of accounting for bad debts. (3 marks)
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Solution 1
The 'Allowance Method' and the 'Direct Write-off Method' are two different approaches to accounting for bad debts.
- Allowance Method: This method involves estimating uncollectible accounts at the end of each period. It provides better matching of expenses and revenues on the income statement and Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
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