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Allowance for uncollectible accounts:
Allowance for uncollectible account is a contra asset account, whose normal balance is a credit balance. The amount of allowance for uncollectible account represents the amount of
Percentage-of-receivables method:
It is a method of estimating the
To record: The
Allowance for uncollectible accounts:
Allowance for uncollectible account is a contra asset account, whose normal balance is a credit balance. The amount of allowance for uncollectible account represents the amount of accounts receivable which are not expected to be collected.
Percentage-of-receivables method:
It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible based on the total amount of receivables for a specific period. This method is otherwise known as balance sheet method.
To determine: Does the amount of adjustment differ from allowance for uncollectible accounts before adjustment that is credit and allowance for uncollectible accounts before adjustment that is debit.
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Financial Accounting
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