Allowance method It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for bad debts account. Aging of receivables method: A method of determining the estimated uncollectible receivables, based on the age of individual accounts receivable is known as aging of receivables method. To journalize: The entry for recording bad debts expense for the year 2018, using the aging of receivables method.

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Chapter 8, Problem 8.8SE

(1)

To determine

Allowance method

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle, by using the allowance for bad debts account.

Aging of receivables method:

A method of determining the estimated uncollectible receivables, based on the age of individual accounts receivable is known as aging of receivables method.

To journalize: The entry for recording bad debts expense for the year 2018, using the aging of receivables method.

(2)

To determine

To prepare: A T-accountfor allowance for bad debts to determine its ending balance.

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