Inaccurate Accounts Receivable: The direct write-off method can lead to an overstatement of accounts receivable on the ...

Bad debt is an unfortunate reality of running a business. A bad debt is money owed to your company that you decide is not collectable. The two most common methods you can use to write off bad debt are ...

The allowance method is the means by which companies are able to better anticipate and prepare for the loss that will occur from customer accounts that will be uncollectible in the future. Unlike the ...

Accurate Financial Statements: The allowance method provides a more realistic view of a company's financial position. By reducing the carrying value of accounts receivable to its net realizable value, ...