Allowance Method: It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records. The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

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Answer 1

Question

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

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Answer 2

Question

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

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Answer 3

Question

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

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Answer 4

Question

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

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Answer 5

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

Answer 6

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

Answer 7

Chapter 5, Problem 9DQ

To determine

Allowance Method:

It is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis. In this method, the bad debt is recorded in the books at the time of sale of the goods on making an estimate about the bad debt as per the past records.

The reason for recording entry of bad debt expense in the sale period and not in the period in which that amount has become defaulted and does not have any chance of realization.

Answer 8

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Answer 9

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Answer 11

Ch. 5 - When is revenue recognized?Ch. 5 - When is a performance obligation satisfied?Ch. 5 - At what amount should sales revenue be recorded...Ch. 5 - Prob. 4DQ Ch. 5 - Prob. 5DQ Ch. 5 - Prob. 6DQ Ch. 5 - Prob. 7DQ Ch. 5 - Prob. 8DQ Ch. 5 - Prob. 9DQ Ch. 5 - Why is the direct write-off method not GAAP?

Solution Summary: The author explains the allowance method, which is a method of recognizing the bad debt before its actual occurrence i.e. on estimation basis.

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