2 questions on the allowance method of accounting i think i understand these, but i want to know if i'm on the right track: question 3: what are the essential features of the allowance method of accounting for bad debts. The essential features of the allowance method of accounting for bad debts are: (1) uncollectible accounts receivable are estimated and matched against revenue in the same accounting period in which the revenue occurred.
Question: what are the essential features of the allowance method of accounting for bad debts answer: the firms would in general try to sale the inventory on cash terms but in order to maximize the sales they allow credit. Essential features of the allowance for doubtful accounts involve the following: 1 collection is no longer reasonably assured there you go, i hope that wasn't too much or i wasn't too detailed in my analysis.
Allowance method allowance method---the allowance method of accounting for bad debts involves estimating uncollectible accounts at the end of each period it provides better matching of expenses and revenues on the income statement and ensures that receivables are stated at their cash (net) realizable value on the balance sheet o net realizable value is the net amount of cash expected to be received. Allowance method is a better alternative to the direct write-off method because it is according to the matching principle of accounting in allowance method, the doubtful debts are estimated and bad debts expense is recognized before the debts actually become uncollectible.
A method of accounting for bad debts that involves estimating uncollectible accounts at the end of each period three essential features of the allowance method: 1companies estimated uncollectible accounts receivable and match them against revenues in the same accounting period in which the revenues are recorded. Bad debts expense as a percent of sales another way sellers apply the allowance method of recording bad debts expense is by using the percentage of credit sales approach this approach automatically expenses a percentage of its credit sales based on past history.